Oral Answers to Questions

DUCHY OF LANCASTER

The Chancellor was asked—

V Organisation

Lynda Waltho: What assessment she has made of the performance of the organisation v in helping young people volunteer.

Edward Miliband: V has made good progress since its launch in May last year, creating 42,000 volunteering opportunities for young people this year alone. It has attracted pledges of more than £17 million in match funding from the private sector, and in addition up to £100 million is available from the Government. I look forward to it making further progress.

Lynda Waltho: I thank my hon. Friend for that answer. I am sure that he agrees that for good volunteering opportunities, we need access to good funding. Unfortunately, Tory-controlled Dudley metropolitan borough council has just cut grants to 40 voluntary organisations in my constituency. Will my hon. Friend visit my constituency and meet my young volunteers and co-ordinators, with a view to their accessing v funding?

Edward Miliband: I thank my hon. Friend for that question. I certainly will come to her constituency to see the good work being done there. She raises the important point that the work done by organisations such as v is significant. It is important that v should be independent from Government and sector-led, and that it hears the voice of young people, but it is also important to ensure that the proper resources are put in, so that we ensure the high-quality volunteering opportunities that young people need. The experience that my hon. Friend mentions gives us a preview of what would happen if the Opposition came to power.

Greg Clark: We do not need to wait for that to happen, glorious though that possibility is. The Minister's own Government promised £3.7 million to Community Service Volunteers last year, but they failed to pay it. CSV approached the Minister, who said that he was anxious to help. That did not come to any good, so CSV approached the Chancellor of the Duchy of Lancaster, but apparently nothing happened. It was not until lawyers got involved that the Government finally paid up, and as a result CSV lost £90,000 in interest. Will Ministers reimburse that lost interest, or will the epitaph for this temporary team be "We were anxious to help, but nothing happened"?

Edward Miliband: The hon. Gentleman raises the case of CSV, and it is a bad case. He is correct to say that the money should have been paid earlier by the Department of Health, and my right hon. Friend the Chancellor of the Duchy of Lancaster and I both got involved to expedite the process. On the question of the interest, I think that his suggestion should be looked at sympathetically. I know that the Department of Health and the Treasury are both in discussions with CSV, and I hope that there is a productive outcome.

Iain Wright: Last Friday night, I presented certificates of achievement to 100 millennium volunteers aged 16 to 24. That demonstrates that the desire to volunteer is strong among young people in Hartlepool, but what additional incentives will my hon. Friend consider to encourage greater take-up of volunteering among young people? For example, will he consider waiving tuition fees for young people who volunteer?

Edward Miliband: My hon. Friend has raised an important point. In the pre-Budget report, the Chancellor suggested looking into whether the issue of tuition fees could be considered in relation to volunteering opportunities. The young volunteers to whom I talk say that they get a huge amount out of volunteering for themselves and their future career, and also get satisfaction from it. Part of the job of v and other organisations is to spread that message more widely, including through young people themselves.

Voluntary Sector Compact

David Amess: Whether the compact on relations with the voluntary sector has been fully implemented across all Departments.

Edward Miliband: Since its introduction in 1998, important steps have been taken to implement the compact. However, we recognise that there is more to do. That is why key aspects of it, such as multi-year funding, are a focus of the next spending review, and that is why we have appointed a new commissioner to oversee its implementation.

David Amess: The Minister must know that the compact on relations with the voluntary sector will be 10 years old next year, yet key principles, such as full cost recovery by key Government funders, have been routinely ignored. There was a cross-cutting review in 2002, and there is now another review. Will the Minister tell the voluntary sector in Southend and throughout the country what will be different about the latest review, recognising that we all welcome a "sinner that repenteth"?

Edward Miliband: What I will tell voluntary groups in Southend is that there has been massive improvement in the past 10 years. Even in the past two years, the proportion of organisations funded on the basis of full cost recovery has gone up from 49 to 57 per cent. Do not take my word for it; look at a document published just before Christmas, which said:
	"This Government has made good steps in its approach to the sector (expansion of Gift Aid, increase in sector funding, new dedicated ministry, and the Compact)".
	Who published that document? Not the Government, but the Conservative party's social justice policy group, on which the hon. Member for Tunbridge Wells (Greg Clark) serves.

Andy Reed: My hon. Friend will be aware that the voluntary sector is particularly well represented in the sports sector, as 26 per cent. of all volunteers are involved in sport. Will he ensure that they fully understand the implications of the compact? He is welcome to attend a meeting tomorrow of a national organisation that represents all those people, of which I am chair. Will he bring the message of hope, which is that volunteering, particularly in 2012, will drive forward our agenda, particularly for young people, who increasingly get involved in volunteering, especially in sport? That is the positive message that I hope he will bring to the meeting.

Edward Miliband: My hon. Friend is right. I am looking forward to the meeting that he mentions. Already 110,000 people have volunteered to get involved in the Olympics, both before and during the games. There is a massive opportunity to drive that number far higher, to get a whole generation of young people, in particular, involved in volunteering, and to use the Olympic games not just for the good that they will do for sport in this country, but for the wider effects that they can have.

Danny Alexander: In assessing the implementation of the compact, is the Minister aware that the Department for Work and Pensions proposes to take £20 million of European social fund moneys away from successful voluntary sector schemes to help the most disadvantaged back into work, and to use those moneys to fund its own activities instead, which may cause, for example, CSV to lay off 100 people and deny help to 17,000 people in the coming financial year? Does he think that that is in the spirit of the compact and, if not, will he ask the Department for Work and Pensions to think again?

Edward Miliband: The amount of money available under the European social fund is falling over time, partly as a result of increased prosperity in the United Kingdom. That judgment is made not in this country, but in Europe. Stability in funding for the voluntary sector is extremely important. That is why we are putting an emphasis on three-year funding, which the Chancellor referred to in the pre-Budget report. I cannot guarantee that every voluntary organisation will continue to be funded. What we can seek to do is change the culture in Government so that there is greater stability in funding.

Volunteering

Si�n James: What steps she is taking to promote volunteering.

Hilary Armstrong: Since 2002 the Government have set a target to increase levels of volunteering, including most recently to increase substantively levels of volunteering by communities at particular risk of marginalisation. In the financial year beginning April 2007 more than 64 million will be invested by the Government in volunteering programmes in England. That is up from 5.3 million in 1997.

Si�n James: I am sure my right hon. Friend will be interested to hear about the work of Swansea Council for Voluntary Service's development project for 14 to 19-year-olds. The projects raises awareness about volunteering for young people and provides new opportunities for them, which is much appreciated by the people they work with. Will she join me in congratulating SCVS on its work and ensure that volunteering continues to receive Government funding?

Hilary Armstrong: I am happy to welcome the reports from Swansea that the local authority there is working hard to improve opportunities for volunteering. That is happening across the country. I welcome local government's recognition that encouraging young people in particular to volunteer is an important way for them to improve their self-esteem, engage effectively with other people, and build skills and confidence that will serve them well in years to come.

Robert Key: What steps is the Chancellor of the Duchy of Lancaster taking in the farms, communities and lands for which she is specifically responsible in the north of England to promote volunteering?

Hilary Armstrong: The Duchy is of course involved in the entire programme and has available to it all the programmes that the Government have initiated. I shall certainly look at that as I go around many of the farms and so on. The volunteering for all programme is designed to encourage everyone, especially those who have been in areas of social exclusion and marginalisation. I am not sure that that would apply to all the Duchy tenants, but we are seeking to widen the range of people coming forward. The hon. Gentleman will be pleased to know that over the past two years the number of people volunteering has increased by 2 million. That will no doubt be welcomed across the House.

Social Exclusion

Meg Hillier: What assessment she has made of the role of the personalisation of public services in tackling social exclusion.

Patrick McFadden: Personalisation is crucial to the effectiveness of public services and tackling social exclusion, particularly among the most disadvantaged. People rightly expect services to be tailored to their own needs and circumstances. That is why the Government have introduced measures such as direct payments for disabled people and those requiring social services, specialised help for struggling pupils at school, and stretching programmes for more talented pupils, as well as the pathways to work programme for disabled people receiving incapacity benefit.

Meg Hillier: In my constituency, we have many varied social and health needs, so I welcome the approach towards personalising services. However, I am concerned that not all our large public bodies are yet ready to provide that personalisation to the person who walks through the door, be it of the jobcentre or the health centre. What assessment does my hon. Friend make of where we stand now and the direction of travel?

Patrick McFadden: I agree with my hon. Friend that we need to go further. She is right to say that public services must be geared to people's individual circumstances. We will take more steps in that direction through the projects to support the most vulnerable families and children that will be announced shortly by the Department for Education and Skills and through the work being done by the social exclusion taskforce and the Department for Communities and Local Government on ways to support adults with some of the most difficult multiple and complex needs.

DEPUTY PRIME MINISTER

The Deputy Prime Minister was asked

Departmental Efficiency Savings

Stewart Jackson: What action he plans to take in response to the initiative on departmental efficiency savings announced in the pre-Budget report.

John Prescott: The Government's objective is to achieve a strong economy and a just society. I continue to play a full part in developing and implementing that Government policy, as the Prime Minister has asked me to do. Significant progress has been made over the past 10 years whereby we have proved that we can have strong economic growth coupled with social justice, as well as exceed our Kyoto targets on the environment.

Stewart Jackson: On performance, the House will know that the Office of the Deputy Prime Minister, unlike any other Whitehall Department, is not required to produce an autumn performance report or a capability review. Is that official confirmation that the Deputy Prime Minister does not have a proper job, or is it that he is incapable of performing the one that he is supposed to have?

John Prescott: As I have told the House before, I carry out the job exactly as Lord Heseltine defined it[Hon. Members: Oh!] Well, hon. Members can check the record as to exactly what Lord Heseltine said to the Public Service Committee about working on behalf of the Prime Minister at their request.
	As for departmental capability reviews, it is a pity that the previous Administration did not have them. If that had been done under the Government whom the hon. Gentleman supported perhaps we would not have had the mess that we had with mass unemployment and the running down of most of our social services which led to the Tories being thrown out in 1997.

David Taylor: Given the Deputy Prime Minister's long track record in trade union activity, will he comment on today's strike by Public and Commercial Services Union members who are concerned about job losses, reductions in pay and the billions being spent on consultancy, which make it ever more difficult for them to deliver the quality of service that we as taxpayers needparticularly today, which, I remind hon. Members and colleagues, is the last day for self-assessment forms to be returned?

John Prescott: As the Government have made clear, the two parties have to get round the negotiating table on these matters of dispute. Indeed, I spend quite a bit of my time involved in that process. I would say to the union that it should look at this Government's record in terms of how many public service employees there are now compared with 1997well into hundreds of thousands are employed in front-line services in hospitals and in education. Of course there have been some adjustments and reformswe accept thatbut, in terms of what the union is talking about, there have been only 35 redundancies. Yes, it has a job to do in presenting the viewpoint of its members, but at the end of the day this dispute must be settled around the negotiating table, and we encourage the union to get there.

Vincent Cable: Since the Department's efficiency savings depend on the success of the profit-sharing agreement for the millennium dome site, and since Anschutz Entertainment Group has said that it has no plan B following the collapse of the 300 million casino project, what plan B does the Deputy Prime Minister have to salvage the revenue?

John Prescott: The contract on the dome is clear for all to see. It was negotiated between the Government and the company, and that is what it will have to carry out. I have not been involved in any way in plan As or plan Bs, although the hon. Gentleman makes that suggestion. I have simply been involved in seeing that a contract negotiated by a previous colleague was implemented. It has been very good for Greenwich, creating more jobs and more prosperity, which mirrors an awful lot of what this Government are doing right round the country.

William Hague: Will the Deputy Prime Minister confirm that despite the initiative on departmental efficiency savings, he has managed to spend 645 changing the sign outside his office from Office of the Deputy Prime Minister to Deputy Prime Minister's Office? Does not that symbolise the shocking waste of money under this Government when thousands of jobs are being cut from the NHS?

John Prescott: As for the name plate, it is dealt with by the Department and its civil servants, to be honest. I hear the argument about 645, but that would not have paid for one sentence of any of the right hon. Gentleman's speeches at the rate he charges [Interruption.] Leaving that aside, if the right hon. Gentleman wants to talk about the waste of money, let us talk about the billions of pounds we paid keeping people on the dole, which this Government changed in 1997.

William Hague: It will not be many months before the Deputy Prime Minister can charge a fortune, because people will split their sides for his speeches. He has all of that to look forward to. In the meantime, since he is responsible for the co-ordination of Government policy, does not the state of the Home Office, with prisoners who should be in jail being released because of the failure to plan, and the state of the health service, with 37,000 job cuts this year, suggest that co-ordination of policy has rarely been so incoherent and paralysed? Does the responsibility for that lie with the Deputy Prime Minister or with the Prime Minister and the Chancellor of the Exchequer?

John Prescott: We fully accept our responsibility for the good government of this country. We have got millions of people back to work, we have reduced waiting lists and put more investment into education and health, so we are happy to compare that record with the 18 years under the right hon. Gentleman's Government. We have a very good record, which I ask him to consider. It is a bit of a cheek for the right hon. Gentleman to criticise us, bearing in mind that he was a member of that disastrous Government, who brought terrible consequences for our people and the country's economy. I am quite prepared to make a comparison. Let the right hon. Gentleman keep on making the speeches; quite frankly, that is just about where his ability lies. I believe that he is now the man responsible for getting the votes back for his party in Yorkshire and Humberside. There were no gains when he was leading the Tory party and if he has to get the level of support back to that in 1992, I am bound to tell him that it will take 40 years. That sounds right. Keep the night-time job and the pay, but quite frankly, he will not be back in government.

Early Years Provision

Anne McIntosh: What discussions he has had with the Secretary of State for Education and Skills on schools policy, with particular reference to early years provision.

John Prescott: Discussions have taken place on an individual basis with my right hon. Friend the Secretary of State as well as within the Cabinet Committee system and, indeed, the Cabinet. With specific reference to early years and schools, I think that our record speaks for itself. We have abolished classes of more than 30 for primary-aged pupils; we are on track to deliver 3,500 Sure Start centres for the under-fives by 2010; we are extending flexible, free part-time nursery care for three and four-year olds up to 15 hours a week, also by 2010; and we have invested 40 million for extra classrooms and extensions to ensure that no child of five, six or seven will be in a class of 30. Thanks to 35 million investment, we have ended the scandal of primary schools having to rely on outside toilets, which characterised their state under the previous Conservative Administration.

Anne McIntosh: Does the Deputy Prime Minister accept that the Government's poverty programme depends heavily on rolling out the children's centres in particularly poor areas where the take-up is the lowest? That programme is being hampered by the fact that primary care trusts such as the North Yorkshire and York PCT are running at a record deficit and will not be able to make a contribution. The trust's nursery programme is also under severe threat because of the code of practice. Does not the right hon. Gentleman accept that early-years provision is in absolute tatters?

John Prescott: I certainly do not accept that. Three thousand children's centres are now being established and there were 500 Sure Starts set up under our previous Administration. They provided opportunities not only for young children, but for mothers to start national vocational qualifications and for old and young people to come together in community centres. I have to tell the hon. Lady that although we have not done as much as should be done, we are on target to achieve what we said we would by 2010. What she said would be a little more acceptable if the hon. Lady had not voted against every Budget to provide the money to pay for those programmes.

Public Relations

James Duddridge: Whether his Department has a contract with a public relations company.

John Prescott: No, it does not.

James Duddridge: Will the Deputy Prime Minister confirm that the Government employed the Labour-supporting public relations consultant Sheree Dodd, and that she provided PR support to him? Given that the departmental annual report will be produced long after he has left, should he not tell the House today how much Sheree Dodd cost?

John Prescott: We did not.

Jim Sheridan: May I remind my right hon. Friend that he has a public relations contract, which was signed, sealed and delivered at the general election? On that basis, may I invite him to come north at the earliest opportunity and remind the people of Scotland what the Labour party has done for them?

John Prescott: I think that is right and the test will come in the elections, which will show exactly what we have done not only in Scotland but in Wales and, indeed, in England. We look forward to the resultwe shall certainly play a part in the elections. I have no doubt that the hon. Member for Banff and Buchan (Mr. Salmond), of the Scottish Nationalist party, who is nodding, looks forward to those elections, too. Judge us on our record for a United Kingdom, not one that is divided.

Ministerial Visits

Simon Burns: How many official visits he has made in the UK since May 2006.

John Prescott: I make regular visits to communities across the UK, which enable me to see the real progress that has been made in tackling poverty, increasing employment and bringing new life to our cities through urban regeneration and improved housing.
	I usually incorporate several strands on each visit. For example, recent visits to Bristol, Liverpool, Hull and London have included discussions on this year's bicentenary of the abolition of the slave trade. The events were launched at No. 10, and I am happy to say that I had the support of the Opposition at that launch to commemorate 1807.
	In addition, when I was in Liverpool two weeks ago, I talked to residents of the housing market renewal pathfinder in the Welsh streets area and visited a community centre in the new deal area in Knowsley.

Simon Burns: Which visit was the most constructive and why?

John Prescott: All those visits were, and I think that visiting to see exactly how Labour's policies are successful in the new deal areas or the pathfinder housing schemes is important. All those policies will be put to the test in the election. I am proud of what the Government have done in the past 10 years, compared with the previous Tory Administration. We will see what the people think when the election comes. Tories should stand by for getting another bloody nose.

Louise Ellman: When the Deputy Prime Minister visited Liverpool, did he meet residents who were satisfied with their new homes, which have been provided as a result of Government housing market renewal policies in the Welsh streets area? Does he intend to make a return visit as part of the commemoration of the abolition of slavery?

John Prescott: I am well aware from my visitand, indeed, from my hon. Friend's supportof the Welsh streets area. Pathfinders have been criticised but nearly 80 per cent. of the people want the old Victorian houses knocked down and to live in decent conditions. That is what the pathfinder programme is about. The people are also proud of the historic landmarks that are coming, especially the commemorations of 1807 and the abolition of slavery. Liverpool has a comprehensive programme this year, which includes celebrating the city's 800th anniversary.

Patrick Cormack: How many of the bloody noses does the Deputy Prime Minister propose to inflict?

John Prescott: I recall that we won that election.

Departmental Capability Review

Andrew MacKay: If he will ask the Cabinet Office to conduct a capability review of his Department.

John Prescott: [Interruption.] Part of the problem is that questions 1, 2 and 3 are followed by question 13. The numbering has changed.
	Decisions on the timing of capability reviews of individual Departments are a matter for the Cabinet Secretary.

Andrew MacKay: Is the deputy leader concerned that the review will decide that there is no need for his Department? Does he believe that, when the Chancellor of the Exchequer becomes Prime Minister, he and the Department will be scrapped?

John Prescott: Well, whether we have a Department or a Deputy Prime Minister is a matter for the Prime Minister. That has always been the case. I leave whoever is the next Prime Minister to make that judgment. [Hon. Members: Oh!] I am at a rather happy demob stage, so I can say that.
	As the right hon. Gentleman talks about the capability review, may I remind the House that he was the official Opposition spokesman on Northern Ireland who, at the time of the Good Friday agreementon which we may see historic success in the next few weekswent on holiday? That may have been good for his perma-tan, but it was not good for the agreement, and certainly did not show any capability.

PRIME MINISTER

The Prime Minister was asked

Engagements

Andrew Stunell: If he will list his official engagements for Wednesday 31 January.

Tony Blair: This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.

Andrew Stunell: The Prime Minister will know that the number of police officers across England and Wales dropped by 173 in the first six months of this year. He will also know that Greater Manchester has seen a cut of 216 police officers. Bearing in mind the fact that his staff believe that his area has had far too much police attention, while my constituents believe that my area has had far too little attention to policing, will he arrange for a transfer of resources, so that both he and I can have a good night's sleep?

Tony Blair: Let me remind the hon. Gentleman that we have record numbers of police: more than 140,000. That is some 14,000 more than we inherited in 1997. In addition, we have thousands of community support officers. Furthermore, as a result of the antisocial behaviour legislation, we are now able to take action against those who make life hell for people in communities such as his. What do all three of those things have in common? The Liberal Democrats voted against every single one of them. I am therefore delighted when Liberal Democrats ask about law and order.

Angela Smith: Today we have seen the takeover of Corus UK by Tata, which will affect every one of Corus UK's 24,000 employees. Will my right hon. Friend commit the Government to adding their voice in support of continued investment in the UK steel industry? Such a commitment would be warmly welcomed by Corus workers in my constituency and elsewhere in the UK.

Tony Blair: I pay tribute to the work done by Corus employees in my hon. Friend's constituency and elsewhere in the country. I assure her that we will continue to support investment in our steel industry, which remains in a difficult competitive atmosphere internationally. I know, however, that the Corus work force are doing their best to ensure that they compete successfully and safeguard jobs.

David Cameron: The Home Secretary has said that the problems at the Home Office will take two and a half years to sort out. Clearly, a long-term approach is needed. Can the Prime Minister therefore guarantee that the current Home Secretary will be in his job for longer than four and a half months?

Tony Blair: I can certainly guarantee that he will continue to make investment in prison places, for example, and community support officers. I point out to the right hon. Gentleman that just last week the latest crime statistics showed a fall in recorded crime yet again. Over the past 10 years, whatever the challenges in the Home Office, crime has fallen. It doubled under the Government he supported.

David Cameron: The fact is that violent crime has doubled and our prisons are in crisisand the Government have had 10 years to sort it out. I asked about the Home Secretary's future. Because the Prime Minister is going, he cannot give any sort of guarantee. Is that not the whole problem with this Government? In any organisation, if one has long-term problems, one cannot have a short-term chief executive. Does the Prime Minister not realise that in those circumstances a Minister such as the Home Secretary just cannot plan for the future?

Tony Blair: Let me just point out that as well as crime being down overall, the most serious violent crime fell by 20 per cent. in the past year. We are increasing investment in prisons: we have increased it by 36 per cent. in real terms over the past 10 years, and we are about to build another 8,000 places. The right hon. Gentleman opposed the investment in our prison places. In addition, as a result of his shadow Chancellor's fiscal rule of sharing the proceeds of growth between tax cuts and investment, he cannot even commit to the 8,000 places. There is no point lecturing me about it.

David Cameron: We do not have to take the Prime Minister's word for it, because the Home Secretary has told us that his Department is not fit for purpose, and is going to get worse. Let us consider his case: the person responsible for giving him the money to sort out the problem is his bitter rival, who wants him to fail. I ask the Prime Minister again: when the Home Secretary does not know whether he will have a job in four and half months' time, how can he plan for the future?

Tony Blair: As a matter of fact, there was a specific agreement to increase prison funding last year. That is why we are able to commit ourselves to 8,000 extra places. I repeat, not only did the right hon. Gentleman oppose the investment that has given us the extra prison places2,500 are coming on stream this yearbut if we adopted the policy that he wants, we could afford only half that number of places. The fact of the matter is that as a result of the Chancellor's strong economic record, my right hon. Friend the Home Secretary is able to provide the investmentand the right hon. Member for Witney (Mr. Cameron) is opposed to it.

David Cameron: The Prime Minister talks of his policy, but he will not be here to implement it. When will he realise that it is all over? Just look at his Cabinet! Half its members are falling over themselves to attack his foreign policy so that one of them can become deputy leader, while the other half are appearing on picket lines to protest against his health policyand there is nothing he can do about it. Can he not see that it is time for him to go?

Tony Blair: The right hon. Gentleman took a long time building up to that.
	Let us compare the record of this Government on crime, police numbers, and asylum and immigration with the record of the last Government. We have cut crime. We have managed to ensure that for the first time ever, the Home Office is expelling more people with unfounded asylum claims than it is taking in. When we came to office the proportion was one in five, and we inherited a backlog of 60,000, which is now down to a few thousand. That is a record of change and investment of which we can be proudand which the right hon. Gentleman opposed every inch of the way.

David Cameron: Why can the Prime Minister not see the reality that is staring him in the face? The Government cannot plan, and Ministers are treading water. They are all waiting for the Chancellor, and not listening to the Prime Minister. His authority is draining away. Why does he not accept what everyone knowsthat it is now in the national interest for him to go?

Tony Blair: I will tell the right hon. Gentleman what I believe is in the national interest: that we continue with a strong economy, the highest levels of employment and the lowest levels of unemployment, that we continue with our policies for the health service, which have seen waiting lists fall by 400,000, that we continue with our policies on education, which have seen the best school results ever, and that we continue to reduce crime and do not, as the right hon. Gentleman's party did, increase it.

Sadiq Khan: My right hon. Friend will know of the massive investment in our museums and galleries that has led to millions of new visitors. In the light of that, will he comment on the decision by the London borough of Wandsworth, only nine months after council elections at which it remained silent on the subject, to close the very popular Wandsworth museum and threaten Battersea arts centre with closure? Is that not an example of a Tory council choosing cuts over cultural heritage?

Tony Blair: Let me add to what my hon. Friend has said by pointing out that we have substantially increased the grant to local government. There is absolutely no cause for the closure of museums and arts centres that perform such a good local role. And of course it is this Government, as a result of our policy of free entry to museums, who have enabled literally millions more visitors, including children, to go to museums. My hon. Friend has given a telling example of the difference between the values of a Labour Government and those of a Tory Government.

Menzies Campbell: Does the Prime Minister share public concern about the fact that at 5 per cent., the conviction rate for the crime of rape in this country is one of the lowest in Europe? Is it not time for a wholesale review of the law to ensure that we provide proper protection for womenand menwho are subjected to this traumatic and violent assault?

Tony Blair: We are already considering how to improve the conviction rate for rape, but I think it fair to point out that more than 80 per cent. of rape cases involve non-stranger rapein other words, the alleged assailant is known to the victimand in more than 50 per cent. of those cases either a partner or an ex-partner is involved. For those reasons, it will obviously always be more difficult to secure a conviction. As the most recent report says, however, the way in which the police and the Crown Prosecution Service are working to help victims of rape has improved the position significantly over the past few years.

Menzies Campbell: Everyone who has ever met a rape victim will know that they are devastated not only by the experience, but by the investigation that follows. Is the Prime Minister satisfied that standards of care and support are good enough?

Tony Blair: I am satisfied that those have improved dramatically over the past few years. Victims are treated with far greater care and far greater attention to their trauma than was the case a decade or a couple of decades ago. I want to point out a detail that it is important to recognise. Although the number of convictions has gone up, not down, it is true that the proportion of claims that result in conviction has gone downbut it is only fair to point out that as a large proportion of cases involve people who either are in or have been in a relationship with the alleged assailant or are known to them, it is inevitable that it will be more difficult to secure a conviction. I entirely agree that it is important that we continue to see what more we can do to make sure that this horrendous crime is treated properly.

Kate Hoey: Is the Prime Minister aware of the anger and disappointment felt in the communities of Lambeth and Southwark over his Secretary of State for Health's decision to close the 24-hour emergency clinic at the Maudsley hospital? Does he realise that, in the teeth of opposition from two local councils with all-party support, as well as opposition from five local MPs including two Cabinet Ministers and his own Parliamentary Private Secretary, the Secretary of State went ahead and made that decision? Will he have a quiet word with her and ask her why she thinks that she knows more than all those people in the community who know how important that clinic is?

Tony Blair: I am sure that local consultations will have been involved in the putting forward of those proposals. I am perfectly happy to have a look at the matter, but I am sure that my hon. Friend would also want to point out that overall, health care in her area, as in other parts of the country, has improved dramatically thanks to the investment and the change that has been made.

David Howarth: Last week the Prime Minister refused to answer a question about the loans scandal. May I invite him to explain precisely why he is refusing to answer questions about that? Is he taking the fifth? Is he saying that anything that he might say in this House might tend to incriminate him?

Tony Blair: The hon. Gentleman knows that, for perfectly obvious reasons, there is nothing I can say on the subject.

Franco-British Nuclear Forum

Jamie Reed: What progress has been made on the Franco-British nuclear forum; and if he will make a statement.

Tony Blair: The first meeting of the forum was held in Paris in November last year, chaired by the Minister for Energy and the French Industry Minister. The working groups are focusing on specific areas for collaboration, and there will be a follow-up meeting on the issue in London in March.

Jamie Reed: I congratulate my right hon. Friend on being the only party leader to support the industry. Given that there is huge international growth in the nuclear industryperhaps best evidenced by the emergence of the Global Nuclear Energy Partnershiphow will the forthcoming energy White Paper enable the UK nuclear industry to capitalise on the vast commercial opportunities that exist?

Tony Blair: I hope that within the next few weeks the White Paper will indicate how we can take forward the licensing regime for a new generation of nuclear power stations. As I said when I was in my hon. Friend's constituency a short time ago, around the world today people are recognising that it will be very difficult for us to have energy security as well as reducing greenhouse gas emissions and CO2 emissions without replacing our existing nuclear power stations. If we do not take that action nowwe have to make decisions nowwe will face a situation over the next few years in which our dependence on gas imports rises, and we are unable to meet our CO2 emissions targets and make sure that we have proper energy security. For that reason, I was heartened to be told when I visited my hon. Friend's constituency that his constituents were very willing to participate in this new nuclear power programme.

Engagements

Paul Holmes: The multinational company GKN recently announced its proposal to close a factory in Chesterfield, the GKN Sheepbridge Stokes plant. As a result, 420 engineering workers based in a modern efficient factory face losing their jobs to Asia or Latin America. What hope or support can the Prime Minister offer to those 420 skilled workers, given that unemployment is now at its highest since 1997, inflation is at its highest since 1992, and interest rates are going up as the Chancellor's policies fail?

Tony Blair: First, let me say that I am of course very sorry, and I extend my sympathy to any of the hon. Gentleman's constituents who have lost, or are likely to lose, their jobs. I can assure him that the local Jobcentre Plus and the Government will do everything that we can, as we have done in other situations, to put a support mechanism in place to ensure that they get alternative employment. I have to say, however, that Chesterfield's economy, like that of the rest of the country, is infinitely stronger than it was in 1997: employment is up and unemployment is down. Yes, it is true that there have been a quarter of a per cent. rises in interest rates recently, but the hon. Gentleman's constituents will remember when interest rates were 10 per cent. for four years, and 15 per cent. for months at a time. One reason why we can confidently expect people to get alternative employment is precisely the strength of the economy.

Eddie McGrady: Following the report of the Police Ombudsman for Northern Ireland on state collusion and murder in Northern Ireland, has the Prime Minister been made aware of the statement last Sunday by a former assistant chief constable, who said that MI5 had made, and continued to make, payments out of its own funding to informers who were involved in at least 10 murders? Will the Prime Minister acknowledge that the ombudsman's report on that collusion dealt only with part of Belfast city and one unit of the loyalist paramilitary organisation, and that much, much more was happening throughout Northern Ireland? Does he not think that this warrants a statement to the House

Mr. Speaker: Order.

Tony Blair: First of all, let me say to my hon. Friend that any form of collusion or improper activity by any part of the police or security services would be completely wrong, and would of course be deeply to be regretted. We are looking carefully at the report that has been published recently and we will take whatever action is appropriate. It is, however, important to emphasiseas I think the report itself didthat this concerns a minority of people, who obviously should not have been engaged in the activities that they were engaged in. But that should not take away from most of the work that officers did, in both the police and the Security Service, which was of enormous benefit to the local community. So it is important, while we deal with the wrongdoing, not to have a completely unbalanced picture of how the police and MI5 operated in Northern Ireland.

David Heathcoat-Amory: The German presidency of the EU is attempting to revive the failed European constitution. Why is the Prime Minister colluding in that by appointing two officials to negotiate the process in private, in clear breach of all his assurances about openness and the need to involve Parliament and the public? If the constitution is revived in any form, will he keep his promise to allow the British people a vote on the matter in a national referendum?

Tony Blair: First of all, let me explain to the hon. Gentleman that there is no question [Interruption.] The right hon. Gentleman; my apologies. There is no question of our agreeing to anything behind closed doors with the German presidency, or anyone else. Last year we agreed that we would take stock following the French and Dutch no votes in the referendums. The German presidency is therefore obliged to take forward proposals for the Council later this year. Of course we are in discussions with the German Government as to what those proposals will be; it would be bizarre if we said, We're not prepared to talk to you about it. Let us wait and see what the German presidency comes up with. Our position on the referendum and the constitutional treaty remains unchanged. But I really do believe, particularly in the light of the strong bilateral relationship that we have with the German Government today, and of the importance of Europe to this country, that it would be a wonderful thing for the politics of this country if people such as the right hon. Gentleman could liberate themselves from this absurd and antiquated view of Europe.

Hugh Bayley: North Yorkshire primary care trust is restricting access to some non-emergency treatments in order to reduce its deficit, and local GPs say that that could put patients at risk. Will the Prime Minister ask the strategic health authority to broker a meeting between the PCT and the GPs as a matter of urgency, in order to ensure that they work together to protect patients, to balance the budget and to safeguard access to the same range of NHS services in North Yorkshire that can be accessed in other parts of the country?

Tony Blair: I would certainly be happy to do so, in arranging such a meeting. My hon. Friend puts his case in exactly the right way. It is clear that the PCT has to deal with the deficit, because, despite the very large additional investment, that deficit is still there. Of course, as a result of the new systempayment by results, practice-based commissioning and patient choicehard adjustments will have to be made in some of the PCTs, but I agree that it is important that they be done in such a way that the huge improvements in the NHS's performance continue to be safeguarded for patients.

Roger Williams: Six years ago Kirsty Jones, a near neighbour of mine, was brutally raped and murdered in Thailand. Her murderer is still at large. Indeed, the Royal Thai police at one time closed the file. Because of the persistence of the Dyfed-Powys police, and especially her parents, the Thai Government have now referred the case to the special investigation branch. However, several of us are still concerned by the lack of progress and the failure to follow up certain lines of inquiry. Will the Prime Minister agree to meet me, and Kirsty's parents, to ensure that the case receives fresh impetus in Thailand, that justice is delivered for the parents and that Thailand is a safer place for young people to visit?

Tony Blair: Perhaps I can come back to the hon. Gentleman on the possibility of a meeting. I wish to express my condolencesas I am sure does the whole Houseto the hon. Gentleman's constituent's family on the loss of their daughter. As he knows, the issue has been raised by Foreign Office Ministers over a long period, and we have been closely involved with the authorities in Bangkok in trying to make progress on that case. I know that Foreign Office officials continue to meet the familyweekly, I thinkand we will try to do everything we can to bring it to a proper conclusion. I am happy to try to arrange some form of meeting, but I will have to come back to the hon. Gentleman about whether it is appropriate that it should be with me.

Dai Havard: May I ask my right hon. Friend about workers' rights? There is more to do on the question of trade union collective rights, but much has already been done on individual rights and health and safety issues. That has been done by enshrining in UK law many of the principles of the European social charter. As I go round Merthyr Tydfil and Rhymney telling people why they should vote Labour in the Assembly elections, may I have two assurances from my right hon. Friend? One is that the good work set out in the Warwick agreement about collective activity will be taken forward in this Parliament, and the second is that any siren voices calling for a withdrawal from the European social chapter will be soundly rejected, whether they come from the Tory toffocracy or dysfunctional policy wonks at No. 10.

Tony Blair: I was with my hon. Friend until the last bit of his question. I do not think that anyone has suggested that we withdraw from the social chapter. It is worth pointing out three things that have happened as a result of the changes that we have made. First, we have a minimum wage that helps millions of workers in this country get a decent living wage. Secondly, issues to do with parental leave, and maternity pay and leave, have seen huge advances, including a doubling of maternity leave and maternity pay. Thirdly, as a result of signing the social chapter, which was so bitterly opposed by the Conservatives, we have paid holiday leave for the first time, which is fantastically important for hundreds of thousands of some of the lowest paid workers in the country. I cannot believe that any party, other than one looking at the past rather than the future, could possibly agree to withdraw from the European social chapter.

Alex Salmond: The Prime Minister is known for his close association with President George W. Bushbut given all that has befallen the Prime Minister's men and women in recent days, is not now the more relevant association one with President Richard Millhouse Nixon? Is there a cover-up in Downing street?

Tony Blair: It is interesting that the hon. Gentleman should raise that question when we are just about to have a Scottish election campaign. Why does he not put to me his case for independence and separation in Scotland? I will tell him why. It is because he knows that that policy would be a disaster for the Scottish economy and for living standards in Scotland. The reason why he cannot raise a Scottish question with me is because he does not dare.

David Borrow: Last year the Royal Society for the Protection of Birds purchased 170 hectares of land at Hesketh Outmarsh in the Ribble estuary in my constituencyland that was rescued from the sea 20 years ago. In a few months' time, breaches will be made in the sea wall to allow that land to return to salt marsh, which will allow a nature reserve to develop. More importantly, it will ensure that the coast of Lancashire is protected from flooding as a result of climate change. Will my right hon. Friend congratulate the RSPB on that initiative [ Interruption. ]

Mr. Speaker: Order. I think that the Prime Minister can answer that.

Tony Blair: Yes, I think that I can. I do congratulate the RSPB, and I want to point out that some of the 2.5 million being devoted to the project comes from the Environment Agency. The project will be a major advance for the local environment and habitat, and it underlines the importance of having an environment policy that is about reducing greenhouse gas emissions and protecting our natural environment in the proper way.

Andrew Selous: According to the Treasury's public service agreements, the Home Office is ahead of schedule for meeting its targets for increasing public confidence in the criminal justice system. Does the Prime Minister agree?

Tony Blair: It could be ahead of that schedule, of course, because crime has fallen [ Interruption. ] The chances of being a victim of crime are at their lowest for 25 years. We have record numbers of police, more offences are being brought to justice, and there has been an enormous reduction in ineffective trials. For all those reasons, I think that the assessment is correct.

Neil Turner: The Prime Minister will be aware that Wigan has a four-star council, a three-star primary care trust and a three-star hospital trust. He may not be aware that we also have the best performing LIFTlocal improvement finance trustin the country. The Boston house centre opened recently, bringing renal dialysis to people in Wigan for the first time. May I invite my right hon. Friend to come to Wigan to open the centre, and see how that magnificent facility is bringing health care closer to patients? I can also promise him that he will be able to meet Billy Boston, the greatest player ever to don the cherry-and-white Wigan rugby league strip.

Tony Blair: I thank my hon. Friend for that invitation. The 30 million Boston house centre will bring services closer to patients, but the same thing is happening all over the country. For all the challenges arising from financial deficits, it is worth pointing out that waiting lists are coming down, more people are getting treatment closer to home, and they are getting it more quickly. Indeed, the GP services report showed that people are getting better access to the system than ever before. The fact that renal dialysis is being delivered closer to people means that they have far more control over their circumstances. It also reduces the pressure on hospitals; that is why investment and reform have to go together.

David Heath: Successive Home Secretaries have produced about 3,000 new criminal offencesat the rate of about one a day for 10 yearsbut they have not delivered enough prison places to prevent another crisis. Does the Prime Minister believe that the one prisoner in 10 who is assessed as functionally psychotic should be in a prison, or in a secure mental unit?

Tony Blair: Of course I believe that it is important to ensure that prisoners are in the appropriate settingbut it is odd for a Liberal Democrat to accuse us of not building enough prison places. The hon. Gentleman says that 3,000 new offences have been introduced, but they have one thing in common: his party has voted against them all, even the most serious and violent ones. We know that Liberal Democrat prison policy would mean that no one would go to prison, because there would be no tough laws to make sure that they did. I can tell the hon. Gentleman that the more that his party raises the issues of prison and law and order, the happier I am.

Tony Wright: Can it be true that we had to pay GPs a lot more money to do a lot less work, and that now we have to pay them a lot more money to take on the work that we paid them to stop doing?

Hon. Members: Answer!

Tony Blair: I do not always do this, but in this instance I will stick up for the GPs. In fact, they are doing a lot more work as a result of the national service programmes [ Interruption. ] The report published on Monday showed that 90 per cent. of people now gain access to a GP within 48 hours, as opposed to just 50 per cent. when we came to office, and that is due in part to the enhanced provisions in the GP contract. I know that the right hon. Member for Witney (Mr. Cameron) is committed to renegotiating that contract, but there is nothing wrong with our GPs being the best paid in Europe, provided that they deliver a better service. I believe that they are doing that.

Bernard Jenkin: In 1998, the Prime Minister was warned by President Clinton's Secretary of State not to agree at St. Malo an autonomous defence capability for the EU that would duplicate and compete with NATO. Is he aware that the NATO Secretary-General warned yesterday that the EU and NATO would be unable to work together in a global crisis and that the distance between them is astounding, or does the Secretary-Generala Dutchman, incidentallyjust believe in an antiquated and absurd view of Europe?

Tony Blair: As I recall, in his previous incarnation he supported European defencebut let me tell the hon. Gentleman why I disagree so much with him over European defence. Of course it is important for Britain to maintain its strong relationship in NATO and many operations, as in Afghanistan, will be conducted with NATO; but in circumstances where, for example, the Americans do not want to be engaged, it makes sense

Bernard Jenkin: indicated dissent.

Tony Blair: I wish the hon. Gentleman would not shake his head before I have given him the answerhe might at least have something of an open mind.
	The fact is that there are operations that we need to carry out with other European countries where the US is not engaged, so it makes perfect sense to do that as part of a European mission. There are somewhere in the region of 10 or 11 such missions around the world. They operate perfectly well, and are not in conflict with NATO.

Point of Order

Christopher Chope: On a point of order, Mr. Speaker. At midnight tonight a new stealth tax comes into effectthe doubling of duty for millions of air passengers. That tax increase has not been approved by Parliament and is not covered by any resolution of Parliament; that is indeed without precedent, as has been confirmed by the Treasury Committee. This is nothing short of a constitutional outrage. Mr. Speaker, what can you do to protect the people of this country from taxation without representation?

Mr. Speaker: I can tell the hon. Gentleman that I shall not be drawn into that particular argument. Perhaps he could start putting down parliamentary questions [ Interruption. ] Order. He could start by going to the Table Office right away.

Historic Counties, Towns and Villages (Traffic Signs and Mapping)

Andrew Rosindell: I beg to move,
	That leave be given to bring in a Bill to amend the law so as to require traffic authorities to cause traffic signs to be placed on or near roads for the purpose of indicating the location of historic county, town and village boundaries; to require the Ordnance Survey of Great Britain and Northern Ireland to mark the boundaries of the historic counties, towns and villages on its maps; and for connected purposes.
	I pay tribute to my hon. Friend the Member for Uxbridge (Mr. Randall) who presented a similar Bill and, indeed, inspired the one that I present today. I thank the Association of British Counties, a society dedicated to promoting awareness of the 86 historic counties of Great Britain, which has campaigned tirelessly for their recognition through proper signage denoting historic county boundaries.
	My Bill extends the principle of giving visible recognition to historic counties by including towns and villages, whose identity is so often lost when a district, borough or county council ignores the correct name of actual places and instead chooses to impose the name of the administrative authority, causing confusion and removing the sense of local identity that is so important to communities up and down our land.
	Restoring identity to counties, towns and villages, along with pride and local patriotism in an historical context, is immensely important. I believe that we must stop the erosion of true local identities and restore the pride that people naturally feel in belonging to a county, town or village that in so many cases has already been lost.
	My town of Romford is probably one of the best examples. As an historic Essex market town, there are indications of our historical links with Essex all over Romfordtogether with the constituencies of Hornchurch and Upminster, which today form the administrative authority of the London borough of Havering. That is a typical construct of the local government reforms of the 1960s. As I travel back after a busy week at Westminster to my home town of Romford, which lies within my home county of Essex, I enter the boundaries of Essex and Romford, but nowhere do I see a road sign welcoming me to either place. They have been written off the map by a dreadful local government culture that seems to recognise only the often made-up and artificial names of administrative boroughs or districts. That cannot be allowed to continue.
	I was born in a place called Rush Green, a community within Romford but divided by a nonsensical local government boundary that splits one side of the area from the other, leaving half of it in Havering and the other in Barking and Dagenham. Only recently new signs were erected to welcome people to the area. You have guessed it, Mr. Speaker, down came the signs that indicated that one was entering Rush Green. They were replaced by signs saying, Welcome to Havering. I am aware that hon. Members have many such examples of the traditional boundaries of their counties, towns and villages being ignored by blinkered town hall bureaucrats who seem interested in promoting only the name of their administrative authority, even if it is a totally artificial name with no historic meaning.
	To see an Essex sign, which should correctly be placed at the River Lea near Stratford in east London, I have to travel many miles, through a host of traditional Essex towns and communities, until I reach the other side of motorway 25, where Essex county council has erected Essex signs as one enters Brentwood. I and many of my constituents, who are proud of our Essex heritage and roots, find that deeply offensive. County councils, London boroughs, elected mayors and transport authorities must never be allowed to strip people of their local identities. The law must be changed and that is what my Bill seeks to do.
	The importance of historic villages, towns and counties is much greater than just local government. They are sources of identity and objects of affection for many people and I sincerely hope that this significant part of our British identity can be secured for future generations. However, to achieve that, we must mandate local authorities to install signage indicating actual counties, towns and villages and giving their names precedence over the name of the administrative council itself. We must divorce administrative, regional, electoral and ward boundaries from true places that have existed for hundreds of years. I have even seen one local councila Labour oneerecting a sign that indicates the made-up name of an electoral ward, rather than the actual name of the community, which has existed for centuries. How damaging to our identity such actions can be.
	I have lived all my life in the community of Marshalls Park, which is where I went to school. That lies within the town of Romford, situated in the county of Essex, which forms part of a country called England. My home, until a future local government review takes place, may lie within the so-called Pettits ward of the London borough of Havering, in the region of Greater London, but those are names with no meaning, designed for administrative and electoral purposes only. We should never allow them to override or replace the true identities and place names of Britain's historic counties, towns and villages, but sadly that is what is happening.
	Let us conserve our heritage so that future generations understand the distinct and rich identities of a Yorkshireman, a Middlesaxon, a Lancastrian, or, like myself, a proud Essex lad. Let us defend our heritage and the history of these islands. Let us especially defend our historic counties, each with their own characterwhether they be Rutland, Flintshire, Perthshire, Antrim, Middlesex or Essexthat form the foundations of England, Scotland, Wales and Northern Ireland.
	The aim of the Bill is to denote, through true, correct and proper signage, the boundaries of historical villages, towns and counties. Signs would contain the traditional crest of the village, town or county, and not the logo of the local authority, unless it was very small and placed at the bottom of the sign. Such a change in procedure would clearly distinguish the permanent historical patchwork of places that comprise our country from the artificial creations of Whitehall that come and go. The Bill would restore our heritage, inspire local patriotism, and uphold our proud local identities, and I commend it to the House.
	 Question put and agreed to.
	Bill ordered to be brought in by Andrew Rosindell, Mr. Simon Burns, Derek Conway, Mr. Lindsay Hoyle, Mr. Nigel Dodds, Mr. Mike Hancock, Mr. Mark Lancaster, Peter Luff, Mr. Greg Pope, Mr. John Randall, Bob Russell and Angela Watkinson.

Historic Counties, Towns and Villages (traffic Signs and Mapping)

Andrew Rosindell accordingly presented a Bill to amend the law so as to require traffic authorities to cause traffic signs to be placed on or near roads for the purpose of indicating the location of historic county, town and village boundaries; to require the Ordnance Survey of Great Britain and Northern Ireland to mark the boundaries of the historic counties, towns and villages on its maps; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 29 June, and to be printed [Bill 55].

Police

Tony McNulty: As a Middlesex MP, I beg to move,
	That the Police Grant Report (England and Wales) for 2007-08, House of Commons Paper No. 207, a copy of which was laid before this House on 18th January, be approved.
	I am pleased to tell the House that we have delivered another reasonable funding settlement for the police service next year. It is important to say that that builds on considerable investment over a sustained period. Government grant and central spending on services for the police will have increased from 6.2 billion in 1997-98 to some 11 billion in 2007-08. That is a cash increase of nearly 4.8 billion, or 77 per cent.almost 40 per cent. in real terms.
	Let me put the increase in resources for the police service in a wider context. The Government have presided over the most intense programme of police reform for more than a century. We have not only provided significant extra resources for the service and increased personnel, but overseen performance management, a changing mix of roles in the work force and the implementation of neighbourhood policing. All those elements command support across the House.

David Heath: The hon. Gentleman knows that there is considerable anxiety in several police authority areasnot least in my area of Avon and Somersetabout the change of policy on the provision of community support officers.

Chris Ruane: You were against them.

David Heath: I spoke for my party when we considered the relevant Bill and we were very much for them.
	I do not challenge the Minister's decision, because I understand why it has been taken, but is there any possibility of deploying unused funds from elsewhere to support the recruitment of community support officers in areas that can recruit and want to meet the Government's original targets?

Tony McNulty: If I may, I will come to CSOs in more detail later. I have said to the chair of Avon and Somerset police authority and others that if there is some slack, or an unwillingness to pick up the respective contributions for the 16,000 recruitment target that was set for April 2007, I will be more than happy to consider the redistribution of the extra CSOs.
	The latest figures from the Association of Chief Police Officers show that 10,000-plus CSOs have been recruited, and the feedback from the forces is that they will all reach the 16,000 target or just exceed it by April 2007. To be fair, the change from 24,000 to 16,000 has concentrated minds. Before the announcement, many authorities questioned whether they could reach the 16,000 target by April even with an accelerated recruitment pattern, which is one reason why we looked at the issue. The catharsis that resulted from our shifting the target means that all the forces have focused on it and, on latest intelligence, are on schedule to meet it. However, I accept the hon. Gentleman's pointI want the target of 16,000 or so to be implemented, and I have told the chair of his police authority that, if give and take is required at the edges, we are prepared to look at that.

Henry Bellingham: I accept that the Minister will come to police community support officers in a moment, but is he aware that Norfolk constabulary is trying very hard indeed to roll out the safer neighbourhoods partnership scheme, which has had a significant impact on reducing crime in Norfolk, particularly petty crime? That is critically dependent on the 280 PCSOs promised by the Department. The figure has been reduced, which means that either the scheme is at risk or Norfolk will have to increase the precept, thus risk capping. What advice can the Minister give Norfolk?

Tony McNulty: Earlier this week I met a delegation from Norfolk, and they made many of the points that the hon. Gentleman has just made. I am encouraged that he shares the Government policy agenda on neighbourhood policing, and accepts that it is successful. I do not dispute the fact that Norfolk has some challenging decisions to make about its budget. However, I am gratified that, as reported by the chair of the police authority, every district, county and other council in Norfolk supported the original target to implementI think implement is preferable to roll outneighbourhood policing, and I wish them well in doing so. We had a strong and fruitful discussion, and I said that I am more than happy to help in any way that I can by, for example, making representations across government and, if necessary, going to see what is already in place in Norfolk

Patrick McLoughlin: rose

Elfyn Llwyd: rose

Tony McNulty: May I finish my sentence? I have, in fact, done so, so I shall give way to the right hon. Member for West Derbyshire (Mr. McLoughlin).

Patrick McLoughlin: I am grateful to the Minister for finishing his sentence quickly. Police authorities throughout the country want to know what their position will be in future years. There was a widespread welcome for the new funding formula introduced by the Government, but there are concerns that the floors remain in place. Can the Minister tell us today whether there are any plans to reduce the existing floors so that counties that thought that they would do better under the new formula may receive greater funding in due course?

Tony McNulty: That is a fair question, and I shall come on to deal with the issue in detail. I accept that under the formula, with its existing floors and ceilings, Derbyshire is a loser, rather than a gainer. However, as I told the hon. Member for Arundel and South Downs (Nick Herbert) when we debated policing in Greater Manchester in Westminster Hall, for every loser there are gainers. I cannot say today how long the taper on floors and ceilings will remain in place, but

Several hon. Members: rose

Tony McNulty: May I finish my paragraphnot just a sentence this timeas my answer may affect the questions that hon. Members wish to ask? Without wishing to be churlish, I urge the right hon. Member for West Derbyshire to talk to colleagues in Cheshire, Cleveland, Cumberland, Devon and Cornwall, Dorset, Durham and so on, which gained from the settlement. I know that there are frustrations; there is some disquiet, and a debate is needed on the whole issue of police funding. The Lyons report will ensure that the subject is debated, at least in part. The frustrations to which I refer relate to the question of when we will receive that report, and I share those frustrations. If, outwith this debate on the settlement, we can have a mature, reflective and grown-up debate on where we should go with police funding, that would be welcome; we would then not need to talk about floors and ceilings.

Judy Mallaber: The problem in Derbyshire is that the change in the formula has been negated for two years running, and there has been no progress in getting it implemented. For example, a similar authority, West Mercia, should get 4 million less than Derbyshire, but gets 10 million more. When will progress be made on that general problem for Derbyshire? We have reasonable local government settlements, but overall the county is losing 22 million because of the floors. Other authorities that have done much better than us over the years keep bleating about their settlements, while taking money away from us.

Tony McNulty: With the best will in the world, I have to demur. We are talking about seeking to reduce the impact of changes in formula across the country. We want to consider the impact of the changeswhich are all in the right direction, by the way; all the changes in resources are upward. We want to equalise the impact across the country, as a prelude to ensuring a more level playing field in police finance, as the right hon. Member for West Derbyshire suggests. With the greatest respect to my hon. Friend, it is not enough for any Member to talk about bleating, or to give any other such description of counties that benefitat least for nowfrom the ceiling, rather than otherwise.
	I ask people to resist the notion that there are winners and losers, although I know that I will hear plenty more comments to that effect in our debate from colleagues on both sides of the House. The overall context is one of significant interest in resourcing for policing, so that everyone is a winner. It is not appropriate language to talk about the cumulative losses of authorities that have been at the wrong end of the floors and ceilings.

Humfrey Malins: I appreciate the Minister's approach to the debate. Does he accept that although Surrey has an excellent police force, our grant per head is only 89, which I think is the lowest rate in the country? It is well below the average in the south-east. That is a very low grant for us, and we have had extra expenses in connection with the police merger talks, and as a result of hosting the EU Heads of State meeting. Surrey is under a great deal of pressure, and I hope that the Minister will sympathise and perhaps take that into account.

Tony McNulty: I think that the hon. Gentleman will agree that I am known for my sympathy for Surrey, in all respects. International events are dealt with under the special grant route. On his specific pointagain, this goes back to the need for a general debate about financehistory plays a strong role in the situation. I take his point about the figure being relatively low, on a per-head basis. However, in terms of precept, Surrey is at the other end of the scale. It has a significant precept, and is ranked higher than many of the 43 authorities in England and Wales, but it has a larger population among whom to spread it. In terms of actual resources, Surrey is not hard done by compared with other forces. It is not ill-served by either the formula or the precept increases. However, the hon. Gentleman makes a fair point, in the sense that it cannot be rightthis is my point about the general police financing arrangementfor the precept per head to range from 88 to 210. Alongside that, the precept contribution as a percentage of overall police resources varies. It is 18 to 20 per cent. for some forces, but for Surrey, among others, the figure is way up in the high 30s, if not 40-plus per cent.

Ian Taylor: Fifty per cent.

Tony McNulty: I do not think that it is quite 50 per cent., actually.

Ian Taylor: It is 49.3 per cent.

Tony McNulty: Well, there we are; it is not quite 50 per cent. I said that. None the less, there should be a broadly similar service across the country. Of course there are specific needs, given factors such as deprivation, make-up and history, but those disparities are the sort of factors that will be addressed in the Lyons report and elsewhere. I half take the point made by the hon. Member for Woking (Mr. Malins), but I do not accept it in the broader sense.

David Taylor: There is indeed a good story to tell, as there has been real-terms growth in police funding over recent years, but the formula needs attention, particularly in the east midlands. One of the flaws of the formula is that there is a lag between population growth and the rate at which grant rises. The per capita increases for the rapidly growing population in the east midlands, where the population growth rate is almost twice that of the rest of England, create problems as the years go by. The best exampleor worst, depending on one's point of viewis Lincolnshire, which is growing at a rate of 10 per cent. over 10 years. The population growth rate for England as a whole is less than 2.5 per cent. Will the lags in the system be addressed, so that the formula is more effective in the five east midlands forces, including Leicestershire?

Tony McNulty: Like other Departments, we seek to address those issues, but I take my hon. Friend's point about the rapidity of some changes and the population increases in many areas, and not just the east midlands. The formula, or formulae, and other elements are perhaps not sufficiently able to keep pace with those increases. I have had discussions about the growth areas with colleagues in other Departments, including the Department for Communities and Local GovernmentI think that it calls itself CLG now; I do not know what happened to the Dto ensure that the police and security dimensions are considered in the early stages of any planned growth in an area. I take my hon. Friend's point, including on the wider issue that I thought he was addressing, which was basically that there were flaws in the floors.

Chris Mole: Perhaps I can help my hon. Friend to move away from arguments on distribution. Ipswich witnessed exceptional events before Christmas, but the police grant will not meet the full costs, so will the Minister say anything about how he can help Suffolk police authority with the additional and exceptional costs that have arisen? I do not refer just to next year's settlement, but to the costs that it will have to meet before the end of this financial year.

Tony McNulty: I am glad that my hon. Friend has had the chance to intervene, because there are very specific circumstances relating to Suffolk, and particularly Ipswich, given the events that took place in the run-up to Christmas. Rather erroneously, one of the leading 24-hour news channels suggested yesterdayI do not know whythat we were somehow letting Suffolk down, and that it would carry a huge deficit because of those special circumstances, so it is useful to have a chance to explain the situation in more detail. The routine is that when exceptional events take place, whether they be the international events that took place in Surrey, or the murder inquiries in Suffolk before Christmas, constabularies apply to the Department for a special grant, outside of the settlement that we are talking about today. The claim is duly assessed by Her Majesty's inspectorate of constabulary in a routine fashion, and then passed to Ministers to make a decision. In the case of this financial year

Several hon. Members: rose

Tony McNulty: I have a whole answer to get through, rather than just a paragraph or a sentence, before I give way. I understand that there are significant local dimensions to the debate, and I will seek to take all interventions. I will then get back to my 20-minute speech, but not deliver the whole 20 minutes of it, if hon. Members follow what I am saying.
	Suffolk has applied for some 9 million in special grant to deal with all its activities thus far. HMIC has determined that much of that claim is entirely reasonable, but this is only the first half of an extended special grant process, because pre-trial preparation and further investigations will carry on well into subsequent financial years. HMIC recommends to me that it is more than appropriate that the authority itself should cover about 1 million of the 9 million. These are examples, because the issues involved go far above and beyond those that we need to address, but at least some of the cost can be taken on board by the Suffolk police authority. It is suggested that we should pay 8 million, and I am convinced that that is absolutely right. We will tell Suffolk that we will provide 8 million of that 9 million request for this year.
	As I said to colleagues from Ipswich and Suffolk when I met the murder inquiry teams and the chief constableon, I think, 4 Januarywe will be very sympathetic, given the unusual circumstances faced by that relatively small force, and when the application is made for the second half of that special grant next year, we will treat the request in a similar, or better, way. I congratulate Suffolk constabulary on all it did over Christmas and beyond. It was an enormous task for such a small force. I thank all other forces for getting involved as readily as they didit was a genuine exercise in working together. I assure the Suffolk force that my right hon. Friend the Prime Minister, who was mentioned yesterday in this regard, and I have taken seriously and sympathetically its request for extra payment.

Lembit �pik: I recognise the risk of the debate becoming a surgery for individual complaints and problems, so I shall try to give my point a wider dimension. The Minister is aware that the Dyfed-Powys police authority argues that its police inflation costs exceed the inflation increases offered through the settlement. Is he willing to consider an environment where the Minister and the Department discuss at a macro level with the police forces how the funding settlements are reached? The police forces are not trying to rip anyone off. They just want their concerns to be taken on board in the formula. Perhaps that would resolve at a strategic level the kind of tactical issues that I would raise about Dyfed-Powys police and which many colleagues raise about their police forces.

Tony McNulty: Again, that is an entirely fair point and should form part of the broader debate that we need to have on all aspects of police finance, in the context of the huge growth that there has been in resources, and recognising that police forces have been using those resources efficiently and productively and want to grow beyond that. I accept the hon. Gentleman's broad point and do not apologise to any Member for raising specific points about policing in a police settlement debate.

Martin Salter: Does my hon. Friend agree that although we can celebrate the fact that Thames Valley police has a record number of officerssome 4,280, thanks to increased investment from the Governmentthe benefits are somewhat diminished by the attempts of neighbouring forces, including the Met, to poach fully trained officers from places like Reading and Slough? Is it not time that we considered transfer payments to compensate areas that are losing out for the costs of training and recruitment?

Tony McNulty: As a Middlesex MP, a London MP and probably a beneficiary of such a perverse relationship, if indeed such a perverse relationship exists, I should say that that is a fair point, which should be considered in a wider debate about police finance in more general terms.

Several hon. Members: rose

Tony McNulty: I am coming to Buckingham.

John Bercow: I am grateful to the Minister for giving way. His charm and courtesy leave my noble Friend Lord Tebbit in the shade. I identify with the hon. Member for Reading, West (Martin Salter), who is entirely right. Given that the Thames Valley police force has been able to balance its budget only by a 7 million cut in support costs, which is necessarily one-off and cannot be repeated next year, and that in 2008-09 the increase in revenue support grant still leaves a 15 million shortfall on required budget, how does the hon. Gentleman expect that Sara Thornton and her colleagues will cope in the face of a projected and substantial increase in the population of the region?

Tony McNulty: I was about to be hugely insulted when the hon. Gentleman started, but I was quite complimented by the time he got to the end of his opening remarks. I pay tribute to Thames Valley police and chief constable Sara Thornton for all that they have done. I have been up there two or three times in the wake of Project Overt, not least to go wandering through the woods around Wycombe to speak to young coppers who were there all the way up to 22 December, long after August and Project Overt. The hon. Gentleman is right to highlight the growing level of resources which, as I said, forces are using productively and efficiently, and they are still making efficiency gains and still seeking to grow. Whatever difficulties forces have in reaching their target with this year's settlement, next year will present a more significant challenge for them to match their ambitions with the resource envelope.
	That means that, on the basis of cross-party consensus, the sooner we have a substantive and hopefully non-partisan debate on the wider aspects of police finance, the better. With 67 per cent. increases and forces wanting to do far more than they have done, not least the Thames Valley force, which is hugely creative and imaginative in all that it does, I do not want to restrain them by flat-lining resources, even after huge increases. The hon. Gentleman makes an entirely fair point.
	I should put on record again my enormous gratitude to Thames Valley for all that it did in Project Overt, not just in Wycombe, but beyond. With the agreement of the local treasury, we have hopefully sorted out the contribution from the centre towards the force's resources spent on Project Overt.

John Bercow: May I take the hon. Gentleman's helpful and conciliatory answer to mean that if the hon. Member for Reading, West and I get together, formulate a powerful case, arrange a meeting with him and advance it in our usual mellifluous and responsible terms, his answer will be yes?

Tony McNulty: I am happy for the hon. Gentleman and my hon. Friend the Member for Reading, West (Martin Salter) to get together, as he calls it.

Chris Ruane: My hon. Friend the Member for North-West Leicestershire (David Taylor) mentioned the influence of population on funding. May I ask the Minister respectfully to consider coastal areas where there are caravan parks where people livethey should not, but they dofor 12 months of the year? In my county, Denbighshire, it is estimated that there are 700 people living in caravan parks. Across the whole of north Wales, there are many thousands. Will my hon. Friend look into the matter and ensure that people living in caravan parks are recognised for the purposes of the police funding formula, and that sufficient funding is put in place?

Tony McNulty: My hon. Friend makes a fair point, which the formula seeks to address in the general sense of population. If we move to even greater complexity, rather like the local government report that we will discuss later, I am not sure how profitable that would be for policing, but the formula should be a mix that captures what is required in the national sense and is flexible enough to reflect local peculiarities of population, growth levels and other elements more readily than it does at present. It is a reasonable point, which I will consider.

Elfyn Llwyd: I thank the Minister for the generous amount of time that he is giving to Back Benchers. May I ask him to look again at the settlement for north Wales? I know that we are all bidding for our own areas. He will recall in September, on an uncharacteristically wet day in St. Asaph, opening the new communications centre, which he said was cutting-edge technology, probably leading forces throughout England and Wales. In that spirit, is he prepared to meet a small delegation from the police authority and myself in order to discuss specific issues and, more broadly, rural policing and the financing thereof?

Tony McNulty: I am grateful to the hon. Gentleman for reminding me of St. Asaph. It was extremely interesting. Naturally, to kick off events in the marquee in the car park, with chandeliers and all that sort of thing, those present sang the national anthem in Welsh. I made sure that I did not, having learned from the experience of previous English occupants of significant positions.
	If there is, as I believe there is, within the broad discussion, a need to focus on the specifics of Wales or the specifics of rural policing in the Principality or more generally, I will have that discussion, with respect, with a wider group than the hon. Gentleman suggests. I have seen the four Welsh authorities together and separately a number of times since taking over my present post in July. I have had discussions with a range of colleagues, particularly Labour MPs from north Wales, and there is still to come an outstanding meetingnot an outstanding MPwith a Tory colleague from north Wales. I am happy to have those meetings, but to deal adequately with the finance base in Wales and elsewhere, and with rural policing and the other points that the hon. Gentleman makes, we need a much wider debate than a series of meetings with individual MPs. I am happy to have such meetings, in a wider context.

Several hon. Members: rose

Tony McNulty: I will go to Essex.

Mark Francois: The Minister will know that the Essex police force provided support to the Suffolk constabulary during its recent major inquiry. Given that he is seeking to encourage voluntary working together between forces on issues such as the vital fight against terrorism, may I remind him that the Essex police force has considerable experience in those fields because of the special facilities at Stansted and the assistance that it gave to the Met on 7/7? Will he bear that in mind when the protocols are being negotiated?

Tony McNulty: With respect to the hon. Gentleman, I shall not, but I hope that Essex and the other police forces with which it draws up those agreements and protocols will do so. I would say generally to the House that whatever people's perspective on the strategic forces merger debate in the summer, I am impressed and heartened by the significant progress made throughout the country in talking to each other in practical terms about shared operations on a local basis, between forces or more regionally. We have heard about the east midlands region, where a lot of work is going on across the five forces in that regard. That is almost the reverse of the point made by my hon. Friend the Member for Reading, West. The proximity of Essex, Kent and some of the other home counties forces to the Metropolitan police means that there is a lot of positive operational two-way traffic and subsequent experience in relation not only to terrorism but to other serious matters that are more common in London and the home counties than elsewhere. I will certainly bear that in mind.

Philip Davies: I am sure that the Minister is aware that many people in west Yorkshire wonder why we have a needs-based funding formula if it is not actually going to be implemented. I understand that West Yorkshire police has been underfunded to the tune of 15 million against the needs-based funding formula. Can the Minister confirm the level of underfunding for this year?
	Let me make a practical suggestion as to how police budgets can be improved. Forces should be allowed to recover the full cost of policing events. For example, people who pay for expensive tickets for football matches and concerts at Roundhay park in Leeds effectively get free policing outside the event which is paid for by local council taxpayers and residents, who are also missing out on policing. Can the Minister

Mr. Deputy Speaker: Order. I think that that is sufficient for the time being.

Tony McNulty: I take the hon. Gentleman's second point, but not his point about underfunding. While we might still be in a transitional phase in terms of fully implementing the new funding and therefore still have floors and ceilings, I would say as sharply as I can that he should go and talk to his hon. Friends in North Yorkshire, which is not a million miles away from his area, and ask them when they want to lose the positive contribution that they get from floors and ceilings. Then he could pop over to Cumbria and speak to his colleagues there: he still has some, including an ex-Home Office Minister. As regards football, if I was being facetiouswhich as a West Ham supporter I am not really entitled to beI should not think that there are many crowds around Elland road or in Bradford at the moment.

Albert Owen: The Minister has talked about population changes. In popular tourist resorts such as my constituency, the population doubles for three to eight months of the year, but that is not taken into account in the current formula, although the growth is year on year. The police have made that case to me, so will he seriously consider it?

Tony McNulty: I take my hon. Friend's point in the same spirit as I have taken those from other Members. This extends to a broader debate about finance. I am sure that he is very happy about the growth in tourism on Anglesey, but that tourism is not new. Of course it has grown, and perhaps grown increasingly, but it did not drop out of the sky all of a sudden. It is not something extraordinary, as in some other cases.
	I forgot to say to the hon. Member for Shipley (Philip Davies) that there are still a few London MPs, whether in Middlesex or Essex, who sit for the Conservatives. London benefits to the tune of some 33 per cent. through ceilings and floors, so perhaps he might like to talk to his colleagues there when he talks to those in North Yorkshire and Cumbria.

Tobias Ellwood: Bournemouth police are very concerned about the fact that tourism is not included in the formula, as is made clear on page 13 of the police grant document. The number of bars is taken into consideration, but not their size. We have 30,000 visitors on a Friday, Saturday or Sunday night. Elements nightclub has 3,000 visitors, compared with the Holyhead pub in Moordown, which has 30. That means that half the police on duty in Bournemouth are looking after a quarter of a square mile and denying the rest of Bournemouth the proper policing that it needs. Bournemouth police are overstretched, and because of the formula they will lose out year after year. I ask the Minister to consider that.

Tony McNulty: Bournemouth benefits from the floors and ceilings system rather than losing from it, so I do not know what the hon. Gentleman's point is in that regard. I take the broader point that tourism and the night-time economy feature increasingly in the activities of many forces throughout the country. If they are not reflected sufficiently in the formula, then let us have a wider debate about police finance. These dimensions are increasingly reflected in the wider local government formula. Many of the comments that hon. Members are making about policing go to wider public service issues that are not specifically the domain of the police authority. We could have a significant debate, I hope on a non-partisan basis, about what we want from our police, what the resource base should be, what the mix between local and national contributions should be, what arenot only for London but elsewherediscernibly national or regional issues that should be dealt with at that level rather than through local policing, and what the relationship should be between local neighbourhood policing, response policing and some of the wider strategic county-wide or region-wide issues, which is something that every force struggles with constantly.

Paul Holmes: The fact that I am the third MP from Derbyshire to intervene probably indicates the strength of feeling about the issue there. As regards the Minister's comments about winners and losers under the floors and ceilings system, it is extraordinary that the losers should have to just bite their lips and get on with it. The Government introduced a new formula in 2006-07 precisely to address the fact that counties such as Derbyshire were historically underfunded over a long period. Under that new formula, the Government have said that Derbyshire should get another 5.7 million a year or so more, but with the next breath they are saying that we cannot have it. That is an extraordinary state of affairs. Derbyshire is currently funding the gap out of the reserves, but it cannot do that for much longer without having to slash policing in the county.

Tony McNulty: I am grateful to most Members for having made non-emotive and grown-up contributions. Talking about slashing this and slashing that is not helpful, nor is it true. Neither Derbyshire nor anywhere else will be slashing its way back to pre-1997 levels, and the hon. Gentleman should be careful about what he says. I give him the same exhortation that I gave to the hon. Member for Shipleyhe needs to go and talk to his hon. Friend over in Cumbria, who benefits significantly from this. We are not saying, We've got a new formula and we're putting floors and ceilings in, so if you lose from it, go hang. We are saying that we need, in all equity, to get to a stage where we can fully implement the new formula, but not in one hit; otherwise, this would be a substantially different debate. Funnily enough, there are few Liberals down in Devon and Cornwall, which also benefits significantly from the floors and ceilings aspect of the formula. I think that there is also the odd oneI mean numerically rather than in terms of the individualin Norfolk, a very odd one in Sussex, and one in West Mercia too.
	There must be some degree of national equity and some recognition that we need to buttress the full impact of any new formula. The Little Derbyshire approach taken by the hon. Member for Chesterfield (Paul Holmes), which is not shared by my hon. Friends who are more substantial Derbyshire MPs, is not good enough. People need to make the strongest arguments in the strongest terms with that wider police backdrop instead of talking about silly little issues for Focus.

Christopher Fraser: The Minister mentioned Norfolk in response to a relevant point raised by my hon. Friend the Member for North-West Norfolk (Mr. Bellingham). The Minister said that he was open minded, but does he accept that Norfolk has one of the lowest ratios of police officers to population and that under current proposals we will have 90 fewer police community support officers than promised? That reduced number is totally intolerable to local people.

Tony McNulty: Yes, but every single PCSO in Norfolk would not be there without the investment, resources and policy of the Government. I had a very constructive meeting withI think, to be fairthe Conservative leader of the county council, a range of his officers and others, and we had a very interesting debate about exciting plans to take Norfolk forward. I wish him well in that regard and the plan has the full support of district councils, the county council and everybody else. They need to make the judgmentI cannot make it for themin terms of where they set their precept and what they do with their budget, but they did express some very interesting plans to me.
	I apologise to the hon. Member for South-West Norfolk (Mr. Fraser), as I was flicking open the Dorset page and had forgotten momentarilyI do not say this in any nasty waythat he had shifted seats, so I am glad that he said Norfolk; otherwise, I would have quoted liberally about Dorset.

Christopher Fraser: That is good, then.

Tony McNulty: Perhaps I should have been nastier, in that case.
	To return to my speechI will respond to individuals' substantial contributions later if there is timeI hope hon. Members will indulge me if I do not dwell on the 20 pages left as a result of my taking so many interventions. I will just make some broad points.
	I take seriously what hon. Members have said about damping the formula. Having looked, lived and breathed the figures for so long, I say in all sincerity that there is a need for a substantive debate on where we are going with the local element of police finance and the huge disparity between authorities. I do not say that in any way to cast doubt on how we have got to where we have. As I said to some hon. Members, history is largely responsible for it, but it cannot be right to have such a huge spread between the level of the precept and how much it contributes to the overall budget in what should be, taking account of variations in local circumstances, a national service delivered regionally and locally through constabularies. There will be issues around that.

Ian Taylor: I made a sedentary intervention earlier and the Minister noted that Surrey is virtually at 50 per cent. and will soon go through 50 per cent. of the precept. The problem for the people of Surrey is whether that means that, when it goes through the 50 per cent., the rules for Surrey police should be set by local residents rather than by the Government.

Tony McNulty: The balance between the two is partly what I have been referring to. I think I mean that in the context of the outliers on both ends of the scale. It is even more complex in the sense that those with lower precepts are not necessarily those that have the lower contributions from a local level to overall police budget. It is not as simplistic and linear as that. When I talk about collectively having a look at the finance base and the local contribution, I do not necessarily mean that everyone should gather up to the Surrey level in terms of a contribution, although I know the precept is high. Nor do I mean that everyone should be down at the Durham and Northumbria ends, where we are talking literally of 88 for a precept in one case and just more than 100 and some contributions of 18 and 20 per cent. in others.
	There must be a way of collectively having a debate that is not about the national contribution or the level of funding from the centre, but perhaps more about round the edges. Increasingly, what are national policing issuesabove and beyond things like counter-terrorism, which should be funded from the centreneed to be balanced by an argument about what the local contribution should be. I understand the point. It is specific at that endin part, the Met, though it has a large population base, and Surrey and Sussex and one or two othersand at the other end historically are some other parts of the Met and some of the northern authorities.
	When we get to a situation where there has been significant investment over 10 years and where it is flatlining or becoming less in terms of growthgrowth is still way above inflationand there are these tight and serious decisions to be made on a force by force basis, the flexibility around the local contribution is a serious element of the equation.
	Significant representations have been made about the settlement. I think that we received some 40 written representations, covering some 26 police authorities, including letters from the Association of Police Authorities, chief constables, police authorities and MPs. Representations were madeinterestingly, I thinkchiefly in nine areas. They are the original level of the settlement, capping and council tax policy, continued use of a funding floor, police grant for the next three yearsin terms of the comprehensive spending review for 2008-09 to 2010-11capital provision for restructuring, neighbourhood policing, funding flexibilities, police efficiency and specific grants. Broadly, those issues were covered by hon. Members in today's debate.

Roger Williams: I understand that the Minister received representations from members of the Dyfed-Powys police authority, who were accompanied by a Minister from the Wales Office. The main issues were community support officers and how Dyfed-Powys producing its budget more prudently had worked against it. The Minister wanted to allow the authority to work towards having more community support officers, but not as many as it hoped to secure. Will the Minister comment on that?

Tony McNulty: The hon. Gentleman is entirely right that the meeting with the police authority and some MPs from Dyfed-Powys was focused on those issues. Given the accelerated targets for PCSOs by April 2007ably assisted and funded by my right hon. Friend the Chancellor to the tune of 90 millionDyfed-Powys was one of the authorities that said that it would rather sit out from the target and then try and pick it up again subsequently. The authority was effectively penalised, through not fault of its own, so I promised that I would look again and see whether more funding could be found to get back on targetnot just for Dyfed-Powys, but for Gwent and Cleveland. To be fair, we had squeezed the pot dryif pots can be squeezedto the extent that although I was pleased to find some moneys, I do not think that Dyfed-Powys should hold out much hope for further moneys from the centre as part of the exercise. I was pleased to find at least some.

Tony Baldry: The Minister went through the various representations that he had received. Earlier in his comments, he said that he did not want to restrain the police authorities by flatlining them. He has made it clear that one of the main concerns of police authorities is that, over the remainder of the comprehensive spending review, it looks as though there will be flatlining. I do not understand how the Minister can reconcile his earlier comments about not wanting to restrain police authorities by flatlining them with the fact that over the next two or three years of the comprehensive spending review, they are going to be flatlined.

Tony McNulty: With the greatest respect to the hon. Gentleman, that argument works only if police authorities are rather like a child and being spoon fed. If the resource base becomes static after 10 years of growth, there are ways in which police authorities and constabularies can look at everything they do to gain further efficiencies beyond what they do now.
	The debatein part, the wider financial debateabout contributions from the local level is one that I hope we can have. We need to see what the balance is and what it should be. It involves the notion of capping and the notion of the relationship between the local precept and the council tax. It involves the contribution from the centre and what it should be in all equity from local areas. There is much to be debated about that.
	I take the point that we are achieving sustained, but far lower, growth over the comprehensive spending review periods than we have thus far. One of the advantages of two-yearand, hopefully, eventually three-yearsettlements is that they can begin to be planned for. I do not accept the notion, which belies experience as well, that throughout those eight or 10 years of sustained and relatively high growth, all that police constabularies have done is put the money in their pocket and just carry on as they normally do. There have already been enormous efficiency gains across police authorities. Significant examination of how police authorities and constabularies do what they do has also taken place. To be fair, the picture today, 10 years on from 1997, of what they do and how they do it is enormously different. That must continue because things are ever changing.
	To put it simply, the terrorism threat is enormous today compared with 1997. All forces work alongside local councils far more readily than they did 10 years ago on, for example, antisocial behaviour and community safety. There is now a genuine multi-agency approach, to use the lingo. The balance and mix throughout the country of police officers, police staff, other specialists and analysts is rightly different from the position 10 years ago. That should continue.
	In short, police authorities and constabularies need to do significantly more in a different way with the high but fixed growth rate of resources. It is a case of much more than, Daddy, stop giving us money, we can't do things. I appreciate that that is a generalisation of the comments of the hon. Member for Banbury (Tony Baldry); it is a form of short hand.
	I shall now conclude my speech because I have been on my feet for 50 minutes or so, although about 30 minutes were taken up with interventions. I am grateful for interventions and happy to take them, but we need to move on. I also appreciate that there is a time limit on some hon. Members' speeches.
	The comprehensive spending review years and the multi-year settlement provide challenges, with which forces will start to wrestle as they settle their budgets this week. There has been a good efficiency record and I expect it to continue. I believe that the police authorities and constabularies want it to continue because the efficiencies that they make release funds to spend elsewhere rather than being clawed back to the centre.
	There is a good news story about what police authorities have to do and where their priorities lie. We have listened carefully to all stakeholders in determining the detail of the settlement, which is a good one. Our proposals will ensure that all police authorities in England and Wales receive a fair share of resources next year. We have added to that some funding flexibility so that forces get the work force mixes right locally, balance their budgets and continue to improve the service.
	I am sorry that I have taken slightly longer than I anticipated but I appreciate the local dimensions to the debate and I wanted to take as many interventions as possible. I commend the police grant report to the House.

Nick Herbert: I thank the Minister for Policing, Security and Community Safety for setting out the grant settlement for this year, but I fear that what he said left many questions unanswered.
	It is clear that the police fear that the 3.6 per cent. increase in their budget this year means that money is already tight. The Association of Chief Police Officers and the Association of Police Authorities estimate that the police service needs an annual 5 per cent. increase in its budget simply to stand still. The president of ACPO said:
	To maintain ... high standards, the Government must maintain sufficient levels of funding. Demands on the police service mean that although the 3.6 per cent. settlement for the service remains above inflation, our expenditure increases at a far greater rate, a fact that must be reflected in our financial allocations. The Government has planned an ambitious programme for police development in the years ahead, but this settlement is not a springboard for it.

Nicholas Soames: I am grateful to my hon. Friend for giving way so soon in his response. As a fellow Sussex Member, he knows that Sussex police have been asked to do more and more. The settlement will make it much harder for them to deliver the target of 525 police community support officers, for which they budgeted under earlier Government commitments. The current plan will leave them with 171 fewer PCSOs. Does my hon. Friend agree that, in his constituency and mine, that represents a genuine disappointment for people who appreciate PCSOs and know that they do a valuable job, especially on low-level vandalism and antisocial behaviour?

Nick Herbert: I agree. The consequence of the so-called flexibility that the Minister mentioned is the withdrawal of the promise of 171 PCSOs in Sussex, or 8,000 nationally4,000 in the so-called respect areas that the Government announced only a week ago. Chief constables throughout the country were busy making promises to communities about the additional policing that they believed that they could provide. They will now be unable to do that.

Martin Horwood: The hon. Gentleman is right to draw attention to the cut in the target for PCSOs. In Gloucestershire, that translates into 74 PCSOs that we were expecting and needed, but will not now get.
	An additional problem is that the one-off funding that is being provided in lieu of the permanent final tranche is heavily skewed towards London and the Metropolitan Police Authority. In Gloucestershire, that means only 167,000 in one-off funding instead of the 1 million in permanent funding that we expected. Will the hon. Gentleman comment on that?

Nick Herbert: I agree. The Metropolitan Police Authority received the lion's share of the remaining funding, although the Government withdrew 70 million. The Met received approximately two thirds of what remained, leaving the provincial forces even shorter of resources. That means that they cannot provide the promised number of PCSOs.
	As ACPO's head of finance pointed out, the settlement is not all that it seems. A range of specific grants, for example, for forensics, supports the general grant. In most cases, they have been frozen. Consequently, as ACPO's head of finance, Dr. Tim Brain, who is also chief constable of Gloucestershire, said, the overall value of the general grant to forces and authorities has been substantially reduced. That will put further pressure on force budgets.
	In my force in Sussex, the special formula grants for rural policing, forensic testing, special priority payments and south-east allowances will remain unchanged and frozen at last year's levels. That amounts to a cut of 2.8 per cent. in real terms and will cause the force and the authority problems.

Albert Owen: The hon. Gentleman has been told that police inflation is some 5 per cent. However, a significant part of police expenditure is on pay. The settlement this year was 3 per cent. and the formula was 3.6 per cent. How does he calculate 5 per cent. inflation for the total budget? I am interested in his reply.

Nick Herbert: The hon. Gentleman is right: more than 80 per cent. of a police force's budget is spent on pay. Pay increases generally outstrip the rate of inflation because the pay settlement is index linked. Other costs increase as the police's mission widens. Consequently, as the Minister pointed out, forces have to make efficiency savings year after year.
	The genuine question is not about this year, when forces are already beginning to face difficulties, but about future years under the comprehensive spending review. The Minister alluded to that, but we need to examine the matter. From next year, which is the first year of the comprehensive spending review settlement, the Home Office budget will be frozen in real terms, and the police have been told to expect an increase of no more than 2.7 per cent. It could be less than that. Consequently, police budgets from next year onwards will be frozen in real terms.
	The Association of Police Authorities and ACPO estimate that, by 2010-11the third year of the proposed settlementthe police could face a funding gap of as much as 966 million. To put that in context, the police's annual national budget is 10 billion, so we are considering a potential funding gap, as set out by the APA and ACPO, of 10 per cent. of the national policing budget. That will pose very serious challenges for the police. In a document called Sustainable Policing, the associations point out that the risk posed by under-resourcing is not that policing will suddenly collapse, but that with the contraction of capability the services provided to communities will erode, and particular functions will either be withdrawn entirely or unable to perform to acceptable levels.
	Concerns are already being expressed up and down the country about the funding that police forces might have in future. The Police Federation has gone so far as to claim that 999 calls could take longer to answer, and that the number of fully trained officers will be reduced. I will refer to that in moment. The Hampshire force is already looking to make a 10 per cent. cut in services in the next financial year, according to the local police federation, and if there is no significant increase in funding, which there will not be, its police authority predicts that it will have to make a cut of 20 per cent. the following year. Durham constabulary is axing 100 police officer jobs and in the next financial year plans cuts of 3 million. Surrey has described its budget for the forthcoming year as insufficient. As my hon. Friend the Member for Mid-Sussex (Mr. Soames) has said, Sussex is predicting a budget deficit of 6 million and cutbacks. North Yorkshire police considers the situation sufficiently dire that the police authority predicts that even a 5 per cent. increasewhich it will not getwould leave a 3 million deficit next year. West Mercia predicts a 1 million gap in funding, with further more acute financial concerns over the next three years.

Maria Miller: My hon. Friend has outlined several areas, including my county of Hampshire, that are experiencing great difficulty in delivering services, and yet we continually hear from the Government about policies such as increasing visible policing, which are not matched by the budgets to ensure delivery. The people who are left to pick up the pieces and deal with disgruntled residents, however, are the police, not Ministers.

Nick Herbert: I agree absolutely with my hon. Friend. Hampshire and other police authorities up and down the country will face a loss of promised police community support officersthere will be 206 fewerwhich will affect her constituency of Basingstoke and others. The chairman of the police authority finance committee has expressed concern about that. It is a pity that in an area where, for instance, the non-emergency 101 number was piloted and customer satisfaction has increased as a consequence, the other side of the equation is a reduction in the front-line policing promised by the Government, diminishing the service available to the public.

Tony Baldry: Is not there another dimension that has not yet been raised in the debate? Given the overall chaos in the Home Office in relation to prisoner numbers and the need for new prison building, is not the danger that the police part of the Home Office budget will be squeezed even more than is projected?

Nick Herbert: My hon. Friend is absolutely right. That is why the police have expressed fear that although the indicated 2.7 per cent. annual increases would be at or around the level of inflation, they could be less than that. We should therefore question whether it was sensible for the Chancellor to take the Home Office out of the comprehensive spending review at such an early stage and to freeze its budget. That prompts questions about how seriously the Government are taking the security and policing challenges to which the Minister alluded. As my hon. Friend the shadow Chancellor has made clear, there is a case for putting the Home Office back within the comprehensive spending review to allow a proper assessment of the challenges facing the country, rather than assessing the priorities of other Departments but making a presumption that the Home Office budget is frozen, which does not seem to make sense.

Chris Ruane: Would the hon. Gentleman put those so-called cuts in historical perspective? Is it true that the previous Conservative Government cut the number of police officers by 1,000? Was that cut the result of rising, static or falling policing expenditure? In contrast, in the past 10 years under Labour, an extra 14,000 officers have been provided.

Nick Herbert: No, it is not true that there was a cut in police officers. There was a rise in the number of police officers under the previous Conservative Governments. We are debating whether policing will be sustainably financed going forward. Yes, there has been an increase in police officer and community support officer numbers. We are now seeing that increase not only starting to fall off but numbers being cut. That does not seem to be sustainable or to make sense.
	The Government have reneged on promises made as recently as the last general election in relation to police community support officers. There is a serious question that needs to be addressed not just by the Minister but by the Government as a whole, as the Chancellor has effectively made those decisions. Whether that has been a consequence of him playing political games with successive Home Secretaries, or of an error of judgment in freezing the Home Office budget, it does not seem sensible to exclude the Home Office from the comprehensive spending review.

Tony McNulty: I am sorry to interrupt the hon. Gentleman in the middle of his mildly pathetic political rant. I hope that he will get back to the issue of policing. How can he describe an increase in the neighbourhood policing fund next year of 41 per cent. as a cut? Will he please not seek, however erroneously, to mislead the House?

Mr. Deputy Speaker: Order. We are careful about the words that we use in debates. Would the hon. Gentleman care to rephrase his last remarks?

Tony McNulty: I thought that my use of the word erroneous covered that, Mr. Deputy Speaker. If it did not, I withdraw the remark.
	Does the hon. Gentleman agree that the neighbourhood policing fund will increase by 41 per cent. next year, and that the cuts that he talks about ought to be considered in that context?

Nick Herbert: The Minister knows perfectly well that I was talking about cuts in promised police community support officers, and there has indeed been a cut in the neighbourhood policing fund, to which I will refer in a moment.
	Let us be clear about who has provided the additional resources for extra police officers. In 1996-97, almost 85 per cent. of police forces' gross revenue expenditure was financed through Government. In 2006-07, the latest year for which figures are available, the proportion is expected to fall to 60 per cent. The amount of police spending financed through council tax has therefore doubled in real terms between 2001 and 2006-07. Council tax now accounts for more than 21 per cent. of police force expenditure finance, compared with 12 per cent. in 2001-02. The Government and Labour Members like to claim that they have recruited additional police officers. They have not recruited additional police officers; council tax payers up and down the country have done so.

Colin Breed: I support what the hon. Gentleman says. In the past two years, our previous chief constable went around the whole of Devon and Cornwall imploring people to support an increase in council tax for additional officers and so on. The people responded that that was what they wanted to do. They have given the money, but they have seen all the advances taken away. Some of them are now saying, We want our money back.

Nick Herbert: The hon. Gentleman is exactly right. People have paid the increases in council tax, they will pay the increase in council tax this year, and they are entitled to expect the service increases that they were promised as a consequence. One of those was the promise of 24,000 police community support officers in the Government's manifesto, on which they have reneged. The Government should apologise to people for that.

Tony McNulty: Will the hon. Gentleman give way?

Nick Herbert: No, I shall make some progress.

Tony McNulty: On a point of order, Mr. Deputy Speaker. Council tax does not pay for the police locally; police precept

Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman, but that is not a point of order.  [Interruption.] Order. He ought to know better than to try to raise a bogus point of order on what is, in fact, a matter of debate. Hon. Members listened with great courtesy to the Minister, and I suggest that they do the same to the hon. Gentleman who is now addressing the House.

Nick Herbert: Of all the fatuous points that the Minister has made so far, that was one of the most fatuous. Of course the police precept is an element of council tax, and it is absurd to claim otherwise.
	The Minister raised the specific issue of the neighbourhood policing fund. I have here a letter sent by the head of the Association of Chief Police Officers, Ken Jones, when the Minister announced the so-called flexibilities in the fund. He wrote:
	The Home Office have now decided that only 35 million of the 105 million is to be returned to us. I am urgently seeking clarity as to the destination of the 70 million and whether the 35 million is available year on year or is a one off grant.
	Where has that 70 million gone? It has been cut from the neighbourhood policing fund; if the Minister can tell me where it has gone, I shall be grateful. As for the 35 million that remains, as I told the hon. Member for Cheltenham (Martin Horwood), the Home Office has decided to allocate 20 million to the Metropolitan Police Service. That leaves just 15 million to be distributed to forces across England and Wales. The Government like to dress this up as flexibility, but in the words of the president of ACPO,
	Being given the flexibility to manage decline is not a position we have sought.
	In the same way, the Government announced changes in the crime fighting fund and said that those amounted to new flexibilities. Actually, announced is not the right word, because the Government have signally failed to make that announcement to the House despite repeated requests from Conservative Members. The Association of Police Authorities instructed its members not to obtain any publicity for the change.
	As a consequence of this flexibility, it is possible that police numbers will fall in the future, something that would have been prevented in the past by the tight operation of the crime fighting fund. Conservative Members welcome flexibility if it is to be used sensibly, for instance to release front-line police officers from administrative tasks that they should not be performing and return them to the beat where the public want to see them. The fear is, however, that as a result of the freezing of the Home Office budget and tight future financial settlements, that will not happen.
	Only yesterday, we learnt that police officer numbers had fallen by 173 between March and September last year. The significant element is not that they fell by that small amount, but that this may be the beginning of a worrying trend. As the president of the Police Superintendents' Association has said,
	This is a trend we will see continue because the financial position for forces is very serious. The only way they can balance the books is to lose staff.
	That echoes concerns expressed by forces and by ACPO.

Maria Miller: I thank my hon. Friend for giving way to me again. He is being very generous.
	In my constituency, Basingstoke, there are only seven front-line police constables on duty at any one time. Does my hon. Friend share my concern that a lack of visible policing is doing little to promote a culture in which antisocial behaviour and fear of crime in the community can be reduced?

Nick Herbert: I do share my hon. Friend's concern. There is little point in increasing the number of police officers if they are to be tied up with bureaucracy, unable to do what they wish to do and what the public want to see them doingget out on to the beat to deter and engage with criminals, detect crime, make arrests and so on. Less than a fifth of a police officer's time is currently spent on the beat. The figures that my hon. Friend gives for a town as large as Basingstoke are remarkable, but I suspect they are replicated throughout the country.
	We, and the Government, should be focusing on how to get resources to the front line, particularly in an environment in which resources will be tight. One thing that the Government should do is take a careful look at the costs of their own administration, and the costs of the central direction that they have imposed on police authorities and the police force. I have been investigating something called the police and crime standards directorate. I do not know whether my hon. Friends know what that is; they may be interested to learn that it is a directorate at the Home Office with 150 staff and an annual budget of 205 million.
	I have been looking into what the police and crime standards directorate does. It includes something called a local delivery unit, which costs 0.8 million a year0.8 million spent centrally to ensure local delivery. There is a partnership performance and support unit which costs 2.3 million, but there is also a performance and partnership policy unit which costs another 2.3 million. I shall be happy to give way if the Minister would like to tell me the difference between the partnership performance and support unit and the performance and partnership policy unit, and why those units are so important to driving up standards in policing.
	There is also something called the performance framework and assessment unit. That costs another 5.3 million. There is something else called the police standards unit, which costs a further 20 million. All that money would have gone quite a long way towards preserving the police community support officers who are being cut from our communities.
	The latest document published by the police standards unit is called Co-ordination of performance assessment and support activity, and is described as
	A joined-up approach from the Home Office.
	Such an approach would certainly be welcome and, it could be argued, unusual. Much of the document, which has been sent to bewildered police forces up and down the country, is completely incomprehensible. I decided to read no further than page 6 when I saw the third bullet point:
	Possible courses of action flowing from this consideration include... No action to take.
	Is it not time for the Government seriously to review the cost of all the agencies that are seeking to interfere in and direct policing, the proliferation of those agencies, and the overlap between them? A significant sum of money is now being spent at the centre to direct policing. At a time when Home Office budgets are frozen and Ministers appear to have lost the argument with the Treasury about whether that will continue for the next three years, it behoves the Home Office itself to ensure that its own spending is moderated so that resources can reach the front line.
	The Government claim that they have cut the number of forms that police officers are having to fill in. They say that they have freed up thousands of police officers, and have made 7,700 forms obsolete across 43 forces. Indeed, they now claim that that number of obsolete forms has risen to 9,000. When I asked the Minister what those forms were, it transpired that the Government kept no record of the information. According to the Police Federation, it is extremely unlikely that anyone could establish whether the forms that have been withdrawn were significant, or whether any real savings had been made.
	We know, however, that the Government have introduced a very important new form which has reduced the amount of time that police officers are able to spend policing our streets properly. That is the stop form, which takes eight minutes for each officer to complete. In fact, the trend has been not to cut the number of forms and the amount of bureaucracy, but to increase the volume of red tape under which the police are labouring.
	When we debated the financial settlement here last year, we were still discussing the potential cost of police force mergers. Since then those mergers have been abandoned, leaving police forces with a bill that has not been met in its entirety by the Home Office. That is another item of expenditure that police forces up and down the country are having to cover. As the chairman of the Sussex police authority has said:
	We have been short-changed by the Government and now the council tax payers of Sussex are being asked to pay for the failure of an unwanted Government initiative. We warned them that an enforced merger would never work and - lo and behold - it didn't.
	In this context, the Minister has said nothing, albeit I accept that he called for a debate on the future of policing. Perhaps there should have been a debate on how forces are to make arrangements in terms of closing the gap and strengthening their protective services. We will have to return to that issue, because despite the abandonment of mergers, police forces share services not only to reduce costs, but also to make sure that they are able to make significant investments and deal with cross-border crime.
	I am surprised that the Minister said that forces were already using resources in, to borrow his words, an entirely efficient and productive way, because that is not the view of the Treasury, which published a document last October explaining that resources would be much tighter than in previous years and that there would have to be efficiencies of double the current level. The Treasury said that work force reform could release
	250m from better overtime and sickness management, and 10-20 per cent. improvement potential across processes from investigation and custody to call handling, training and HR
	human resources.
	As the work force consume 80 per cent. of a police force's budgets, those are very significant savings to demand from the work force. If we had been having a sensible debate, the Minister could have told usand police forcesexactly how the Government expect such savings to be made over the next few years so that resources do not have to be cut at the front line. In the absence of the Government offering any explanation of why the figures are justified or how the savings will be achieved, it is inevitable that we pay attention to the fears of those running the forcesthe police chiefs and authoritiesthat those savings will not be achievable, and that as a consequence there will be cuts.
	I shall not detain Members much longer, because I know that many of them wish to speak, but let me say a few words in conclusion. Police resources are tight and police stations have been closed, and a judgment must be made as to whether the savings that the Government are now asking the police to make will impact on front-line policing. All Members support efficiencies being made and agree that it is right that any public service that has received a large increase in resources should deliver value for money to the taxpayer. Therefore, in respect of my own force in Sussex, when it proposes measures to save up to 10 million a year by 2010 and some of those measures are a good way to save public moneysuch as to share the 500,000-a-year police helicopter with Kent and SurreyI hope that my hon. Friends will take them seriously and agree that they are good measures. However, we would react with concern if police forces were to talk about reducing the opening hours of smaller police stations.
	The challenge over the next few years will be for forces to deliver savings in a way that improves the service that they give to the public and deals with waste, bureaucracy and inefficiency and does not cut front-line services. The Government have a serious part to play in addressing the bureaucracy that they themselves have created.
	The Centre for Crime and Justice Studies has pointed out that the UK now spends proportionately more money on law and order than any other country in the Organisation for Economic Co-operation and Development, including the United States of America and major European Union members such as France, Germany and Spain. The largest proportion of that moneyalmost two thirdsis allocated to the police. That has led to an increase in police numbers. The key question will now be whether those numbers are sustainable and whether those officers will appear on the front line. What the public want to see is police officers out of their police stations and on the beats. They want to see the police being properly locally accountable. They want a criminal justice system that functions properly, and which is joined-up so that when the police make arrests and try to bring offenders to justice there is a court system and a prison system that backs them up. The public also want to see swift justice and firm justice, not soft justice as a consequence of cautions replacing convictions that should properly be made in court, and not unenforced antisocial behaviour orders or uncollected fixed penalties. As a Member said, the public have paid their taxes and they are entitled to a return on the investment that they have made. Their tax bills have gone up, and their council tax bills have soared; they are entitled to proper levels of policing in return.

Mr. Deputy Speaker: Order. Before I call the next speaker, I remind Members that Mr. Speaker has placed a 10-minute limit on Back-Bench speeches, and that that applies from now on.

Paddy Tipping: Let me start with the good news. Police numbers in Nottinghamshire are at record levels, and the police are backed by valuable police community support officers funded by the Government. The crime statistics came out last week: vehicle crime in Nottinghamshire has decreased by 22 per cent. and overall crime has fallen by 4.6 per cent.the fifth consecutive fall. There have been significant reductions in serious crime in the city of Nottinghamhomicides and gun crime. Nottingham has an undeserved reputation in that respect in the press. Police and local authorities working together have made genuine improvements. Most importantly, Her Majesty's inspector of constabulary has been looking at the Nottinghamshire police over a long period, and it has concluded that it is effective and efficient and that it is an improving police force. However, we should be cautious: in relative terms, Nottinghamshire is still a weak performer. Although much has been achieved, there is still much more to be done, and there is no room for complacency.
	Let me now turn to the bad news. All across north Nottinghamshirefrom Halam to Hucknall and from Rainworth to Ravensheadnobody believes the figures. The fear of crime continues to increase, and people complain about lack of police presence. There is a strong view abroad that the Nottinghamshire police are underfunded. That has not been helped by the strong campaign run in recent years by the Nottinghamshire police authority, which has involved the chief constable, arguing for more cops for Notts. The reality is that grant to Nottinghamshire police has increased significantlyby 36.4 million since 1997 to 145.9 million in the current financial year, which is a 33 per cent. increase in cash terms and a 7.8 per cent. increase in real terms. The indications in respect of next year's settlement are that Nottinghamshire will receive an additional 4.5 million.
	However, there are anomalies, and there is room for complaint. The average spending on police per head of population in England in 2005-06 was 174. In the east midlands as a wholethe five police authoritiesthe figure was 143, and in Nottinghamshire it was 158, so in comparative terms per head of population the police in the east midlands and Nottinghamshire are being underfunded. It is interesting to note that the Nottinghamshire police authority has more crimes per officer than any other police force in the country, save one, and that the spending per offence in Nottinghamshire is the lowest in the country. Therefore, there are real concerns.
	Faced with that financial situation, and with the view abroad that the funding formula is not fair to Nottinghamshire and the east midlands, there are real problems. There is a police authority meeting on 21 February and difficult decisions will have to be made. It has already been announced that the innovative Drug Abuse Resistance Education programmeknown as DARElooks set to be cut. Adam Cable, who is aged 12 and lives in Hucknall, wrote to me as follows:
	I am...writing to say that I am terribly upset that Nottinghamshire Police Authority have decided to stop doing the DARE programme...Thanks to the DARE programme I am now more confident about speaking to others.
	He concludes:
	I still think DARE has worked wonders for youths and teenagers and that it's a terrible loss to lose it.
	There is also speculation about the future of the mounted section. Police horses provide high-profile policing and reassurance to people in the community. The speculation is that in 2008, the mounted police will be cut, thereby saving 200,000. That is an achievable saving, but in the long term the only way to balance the books, as has been acknowledged, is to look at manpower. The figures are fairly straightforward. Nottinghamshire police face a budget shortfall of 16.5 million, if nothing changes, by 2010-11. It would be sad if the record levels of police officers that have been achieved were to be reduced.
	So what is to be done? There has been much discussion in this debate about floors and ceilings. The floors in the east midlands work against the five police authorities to the tune of 14.8 million, and, in the case of Nottinghamshire, the figure is 5.1 million. We cannot change the system immediatelyit needs to be stablebut this is an allegedly fair funding formula, and over time, the Minister must give some assurances about how it can be tapered and wound down. He said the following in a letter of 22 January to Nottinghamshire police:
	I recognise that those police authorities that have had their grant scaled back feel they are not getting their full share of the pot.
	I would like him to move away from recognition and into action, and to show good faith by reducing the ceilings and tapering the formula.
	Secondly, the Minister is well aware of the important work of the East Midlands Special Operations Unit, which brings together the five police authorities and focuses on serious crime. It is jointly funded by the police authorities themselves and by the Government. The grant from the Home Office runs out on 31 March 2008. Ministers are aware of the significance of what has been achieved, and I invite the Minister to look closely at maintaining that grant in future years.
	Thirdly and most particularly, the Minister and his officials must look at the work that the five east midlands police authorities are doing in response to Her Majesty's inspectorate of constabulary's report Closing the Gap. There is a real recognition that protective services in the east midlands are very weak. In fairness to the five authorities, they are trying hard to work together, and the progress that they have made probably puts them ahead of any other region in the country. Let me talk about some of the plans that are going ahead. A small team of officers, backed by accountants KPMG, is looking at how regional collaboration could make money available for protective services. The police authorities are working up a scheme for a regional information technology network, not least to provide shared information to help tackle back-office costs and to help with business management systems. That costs money up front, but in the long term it could produce significant savings.
	The police are also working hard to recover assets. There is 10 million-worth of unclaimed assets in the east midlands, which does not have an asset recovery body. However, part of the East Midlands Special Operations Unit is trying to recover those assets. There is also a very strong case for setting up a confidential unit in the east midlands, so that material received covertly and secretly can be shared across the region.
	The five east midlands authorities will shortly be setting up a joint sub-committee, involving all five police authorities. That is a sign of their intent. The Minister will soon be writing to police authorities asking them to make bids for collaborative projects in order to bridge the gap. I invite him and his officials to look very carefully at the work going on in the east midlands. What those authorities are trying to achieve is what he wants. Progress is being made. There is more to be done, but when the Minister issues the invitations for bids, I hope that he will ask the officials, chief officers and representatives of the east midlands police authorities to meet him, so that their bid can meet the bidding criteria that he is about to set out.

Mark Hunter: I would like to preface my contribution by congratulating our police officers and acknowledging the tremendous work that they and their support staff do throughout the country, sometimes under extremely difficult circumstances. I am sure that other Members will join me in doing so and agree that is our obligation, as Members of Parliament, to ensure that the support and funding that is so desperately needed is available to the police.
	The funding given to police authorities must be realistic, in order to allow them to deliver the high level of local policing that the population expect and deserve. Last November, the police service expenditure forecasting group estimated that without additional funding, the gap in police funding nationally in 2007-08 would be 380 million, being optimistic, or 391 million, being realistic. It also forecast that in 2008-09, that gap will reach 582 million or 656 million respectively. As the Association of Police Authorities argues, that gap
	represents a significant proportion of the overall police budget and poses a very real risk to maintaining current services and capability.
	This report does little to reduce that gap. The mere 3.6 per cent. announced does not address the funding crisis that many police authorities are facing.
	In my constituency of Cheadle, the Greater Manchester police face a 39 million deficit over the next three years, according to the Labour-run authority's own figures. Some estimates suggest that that could result in the loss of more than 600 police officers, in addition to the 216 already lost.

John Leech: As my hon. Friend rightly says, such a loss would be on top of the 200-odd officers whom we have already lost this financial year. Michael Todd said that we required a minimum of 8,000 officers, but we now have fewer than that. Does my hon. Friend agree that, if we lose up to a further 600 officers, as he has estimated, the total number of officers would be closer to 7,000, rather than 8,000?

Mark Hunter: I thank my hon. Friend for his contribution, and he is of course absolutely right. It is a matter of record that Michael Todd, the chief constable of Greater Manchester police, has already said that as long as the GMP continues to subsidise the funding of the Metropolitan police, the situation is unlikely to get any better. Frankly, given the obvious lack of financial support from central Government, the GMP will have no choice other than to cut local services.

Chris Ruane: In case the hon. Gentleman fails to mention it, will he remind the House how many officers there were in the GMP in 1997, and how many there are today?

Mark Hunter: I regret to say that I am not sure whether the hon. Gentleman was a Member of the House at that time. I was not, and I am sure he will understand if I do not have those statistics immediately at my fingertips. However, I am happy to correspond with him on this issue.

Chris Ruane: rose

Mark Hunter: I want to make some progress, as I am at only the very early stages of my contribution.
	Such a situation is unacceptable, but it is sadly not uncommon. The Hampshire force, as we have already heard from the hon. Member for Arundel and South Downs (Nick Herbert), will have to cut 10 per cent. of services in the next financial year and predicts that unless funding increases significantly, it will be looking at a 20 per cent. cut in the following year. The North Yorkshire police force predicts that even with a 5 per cent. increase in funding it will still have a 3 million deficit next year, and the Derbyshire police authority faces a 14.6 million funding deficit over the five-year period to 2010-11.
	The Government need to do more to sustain the work that local police authorities are doing. A joint report by the APA and ACPO in November last year called for
	Government to provide realistic levels of funding to ensure continued improvements in policing for communities across England and Wales.
	By not meeting their responsibilities, the Government have left local council tax payers to foot the bill for the increase in police numbers that Labour promised. The amount of police expenditure financed through council tax has almost doubled, in real terms, between 2001-02 and 2006-07. Council tax now accounts for more than 21 per cent. of police force expenditure finance, compared to only 12 per cent. in 2001-02.
	With high levels of council tax everywhere, and the Government threatening to take capping action to stop the average council tax increasing by more than 5 per cent., the police are entering a funding crisis that can be fixed only by significant increases in funding from central Government3.6 per cent. is not enough.
	To add insult to injury, residents paying council tax are actually being double charged to cover the cost of community support officers. Due to the cuts in Government grants, police authorities increasingly have to go back to local councils to ask for more funding to make up the deficit. That is over and above the police authority precepts that residents are already paying. That effectively means that some residents are paying for CSOs twice, once through their precept and once when police authorities are forced to return to local councils with a begging bowl. That situation places too much of the burden on local council tax payers.

Mark Tami: The hon. Gentleman says that 3.6 per cent. is not enough. Can he give a round figure that he thinks would be enough and how would he raise the extra money?

Mark Hunter: I am pleased that the hon. Gentleman has raised that issue. If he bears with me a little longer, I will come on to precisely how that funding gap might be met. I suspect that he will not be too surprised by what I have to say.
	The Durham police authority is a case in point. The situation there is desperate. If funding does not improve it will have to reduce police constable numbers by up to 300, and with the current budget it is planning a reduction of 100 police constables in the coming year. Even with those cuts, the Durham police authority would need an 18 per cent. council tax rise to meet the bill.
	Lack of central funding and a capping of council tax leaves nowhere for police authorities to turn, and cuts are inevitable if the Government refuse to provide a realistic level of funding for local police authorities. Members of Parliament from all parties agree that we need more police out on the streets. A stronger police presence is essential if we are to be serious about fighting crime and resolving the issues of antisocial behaviour which blight the lives of too many of our constituents.
	However, under this grant report, the level of funding offered means that police numbers will again fall in a majority of police authorities. The cuts are already taking place. The Home Office's announcement yesterday, admitting that police officer numbers nationally have fallen by 173 from the end of March last year to 141,873 at the end of September, comes as no surprise to those of us who have been involved with police funding issues in our constituencies.
	In the last year, 2005-06, 24 forces reported reductions in officer numbers, while only 19 reported increased officer numbers. Police authorities cannot keep up police officer and CSO numbers if their funding is being cut. In Hampshire, which was mentioned earlier, budget cuts caused the number of CSOs to fall by approximately 40 per cent. The Government are putting the police authorities in a very difficult position. Plans that have been made based on higher levels of funding and high staffing numbers must be re-made, wasting precious time and resources.
	Jan Berry, the chair of the Police Federation, spoke to  The Observer earlier this month on this issue and said:
	If you're going to increase police numbers you have to make sure you've got the money to maintain that.
	The Government have not done so.
	Lack of funding has also caused a significant number of police station closures. Some 580 police stations have closed since Labour came to power in 1997, with the worst hit areas including Essex with 66 closures, South Wales with 43 closures, Gloucestershire with 40 closures and Greater Manchester with 39, including two in my constituency.
	The Government are making it more difficult, not easier, for police to provide good local services. Local police stations are vital to ensure that the local community have confidence in their police, and are important for consolidating ties between police and community to allow them to work effectively together. By closing so many police stations the Government are creating a situation in which a permanent and personal local police service is a thing of the past for all too many people.
	The Liberal Democrat We can cut crime! campaign, launched last week by my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell) posited a solution to the funding problemnamely that the 97,000 per day currently being spent on the identity card scheme be spent on local police. That money could go directly to police authorities, which could use it to create 10,000 more police officers and 20,000 community support officers to back them up. It could also be spent on greater use of the latest IT systems and communications technology. The APA has said that one of the key risks of funding shortages is that police authorities will be unable to invest
	in improved technologies and systems which will produce longer term savings and efficiencies.
	The fourth report of 2004-05 by the Home Affairs Committee noted that a Home Office commissioned study, A Diary of a Police Officer, found that officers were spending as much time in the police station as they were on the street. Of the 43 per cent. of time spent in the station, 41 per cent. was spent on preparing prosecution files and paperwork. We need to reduce that time by spending more money on employing civilian administrative staff to allow police officers to spend more time out on patrol where they are needed.

Chris Ruane: I agree about the need to take paperwork away from front-line police officers. In North Wales, in 1997, there were 533 civilian staff and there are now 977. Can he give me the figures for Greater Manchester?

Mark Hunter: I will be happy to confirm the precise figures after the debate, as I do not have them immediately to hand. I am pleased to hear that progress is being made in the hon. Gentleman's area. I have not tried to suggest that every aspect of the situation is bleak everywhere. In fact, I made a point of mentioning the number of police authorities that have seen an increase in police officer numbers over the time. Unfortunately, they are in a minority.
	If this debate has shown anything, it is that we need more and better funded police services, not an expensive and intrusive identity card system, to tackle the criminal problems facing Britain today.

John Leech: Has my hon. Friend ever met a single constituent who has told him that they would prefer an identity card to more police on the street?

Mark Hunter: I have knocked on a fair few doors in my constituency and others over the years, but I have not met anybody who has said that they would prefer an identity card scheme to greater investment in our police forces and an improved police presenceso woefully inadequate at present in many constituencieson our streets. Such people may exist somewhere. The introduction of some flexibility into police funding is welcome, but it does not go far enough. The crime fighting fund and the neighbourhood policing fund have been criticised by the APA and ACPO for placing unnecessary restrictions on police authorities. Both require a particular mix of staff that may not be optimal for the individual local communities concerned. Only the police authorities can know what mix of officers and other staff is needed to provide the best level of local policing. Placing ring-fenced restrictions on funds can lead to distorted budgets and cause highly trained officers to be moved into administrative roles. That causes inefficiency and the poor use of resources.
	The APA and ACPO have both gone on record with their requests for the freedom and flexibility needed to deliver the best possible local policing to our communities. We need to give them that freedom by stopping the ring-fenced funding and allowing police authorities to make staffing decisions that are tailored to the needs of their areas. The APA has stated that, to meet its financial needs fully, the police service needs a funding increase of more than 5 per cent. annually just to stand still. Without significant moves in that direction, the accumulated impact of the deficit facing so many police authorities will worsen, police staff and officer numbers will continue to fall and the much needed police presence in our communities will be even less substantial than at present. That will allow levels of crime and antisocial behaviour to soar to completely unacceptable levels.
	The Government grant report does not do enough. Some police authorities will be happy with the funding that they have been allocated, but many will not. They will have to make difficult decisions in the coming year about whether to cut services or seek a rise in the council tax precept to an exceptionally high level. They should not have to make such a choice. The Government must support local policing and increase funding to a level that would allow police authorities to provide the sustainable and improved service that our local communities demand and deserve.
	Finally, the Government's approach to delivering local policing, like so many other policy areas, has been disfigured by their talking big but delivering small. It has dashed the expectations of many local communities. The stop-gap funding provided by the Government shows their inability to keep their promises, and reflects the political short-termism that permeates so much of their policy. Cutting police numbers while wasting money on big Government schemes such as ID cards shows a woeful lack of priorities and the extent to which the Government are out of touch with what the public want.

Fiona Mactaggart: I want to start by expressing my gratitude for the impact that the Government have had on policing in Slough. That has not been the approach exhibited by Opposition Members, but when I was first elected my regular surveys of constituents showed that their greatest concern was the fact that police officers were absent from the streets. Now, after a period when people complained that officers were seen only in the centre of Slough and not in their neighbourhoods, we are getting to the point that they complain that they do not see police officers in their roads. That is a reasonable point to have reached. We have got there thanks to the Government's investment in policing. Initiatives such as the policing priority area in Britwell and the introduction of police community support officers have brought about a shift in people's feelings about policing, but that is now under threat.

Colin Breed: I agree that more police can be seen on the street, but the bigger problem arises when people telephone the police in an emergency. They want an officer to call, but that simply does not happen, and as a result they believe that there are too few police officers to respond to emergencies.

Fiona Mactaggart: In fact, I have noticed that my constituents make fewer complaints about how the police respond when telephoned. Moreover, officers less often say, My hands are tiedI think that that sentence should be banned, because it means that someone else should get the blamewhen contacted by the public. I agree that we must make sure that the police should respond appropriately to people, although that might require us to educate citizens about how they should go about contacting the police.
	Slough's neighbourhood policing presence is under threatnot from the Home Office, but from the Metropolitan Police Service. Slough is in the CDRP family that includes Brent, Ealing, Greenwich, Hackney, Haringey, Islington

Mr. Deputy Speaker: Order. I am a little apprehensive about the use of initials in the House. In case everyone does not know precisely what they mean, I wonder whether the hon. Lady will spell out what they mean at least once.

Fiona Mactaggart: Thank you, Mr. Deputy Speaker. The Home Office bunches crime and disorder reduction partnerships into crime families. I was giving the names of the crime family to which Slough belongs, and I think I got as far as Islington. The others are Lambeth, Lewisham, Newham, Southwark and Tower Hamlets. The House will see that Slough's fellow family members all have something in commonthey are all in the area served by the Metropolitan police. In addition, they all have more police officers per resident than Slough, and their officers are better paid.
	I see that my hon. Friend the Minister for Policing, Security and Community Safety has returned to his place. My hon. Friend the Member for Reading, West (Martin Salter) intervened on him earlier on this point, and the Minister was rather gracious in acknowledging that his constituents benefited from the Met's poaching of officers from Thames Valley. When he responds to the debate, I hope that he will say that he will take action to bring that poaching to an end.
	Police officers in my area get a starting salary of 20,000. That compares with the 27,000 that Met officers get. After two years, those in my area get 24,000, which compares with 31,000 in the Met. A very vigorous campaign in Sloughrun by me, my hon. Friend the Member for Reading, West and our local police officershas led to the introduction of area allowances that reduce the gap, but other bribes are available. For example, Met officers enjoy free travel for a 72-mile radius around London, which of course includes the borough that I represent.
	The Metropolitan police force is undertaking a sustained and predatory attempt to recruit experienced officers from Slough. I engaged in correspondence on this matter with Sir Ian Blair, before he received his knighthood and became the Metropolitan Police Commissioner. In November 2002, when he was the deputy commissioner, he wrote to me saying that the Met
	had persistently argued, in the past, for the cessation of adverts designed to encourage officers to move forces,
	but such advertisements are being used deliberately in my constituency. In addition, I was told that the Met wanted
	the introduction of a transfer fee for experienced officers to recoup the cost of training.
	However, neither idea was supported by other forces around the county.
	At present, the Metropolitan police force is recruiting in a predatory manner in the Thames Valley police area. It is offering bountiesI can think of no other wordof 200 or 250 to anyone who introduces an experienced officer into the Met. Next Monday, a coach load of 30 Thames Valley officers will go to a Met open day, and the substantial pay differentials mean that it is not unlikely that we will lose some of them.
	I recall what it was like in Slough in the days after the Tory dearth of police officers. The investment made by the Labour Government led to the recruitment of more police officers, but they were very inexperienced. That was evident in the quality of our policing. Now, we have reasonably experienced officers, but they are being taken away by the Met's recruitment drive.
	My local police commander told me that between 25 and 30 cops had left the area since last autumn. In Slough, there are 12 cops out on patrol for each shift, but the commander told me that he had received two more resignation notes in the previous two days. That is the scale of the impact. As he said:
	We have the dilemma of balancing experience on the shifts or the specialist teams such as CID. The shifts are generally young in service and rely on the Sergeants for experience (but they are sometimes young themselvesin fairness, most of my Sergeants or Acting Sergeants are pretty experienced and are very good). The amount of serious crime in Slough necessitates having some experience on CID, but even then they are 'fed' from shift, so I can have some very young (service-wise) DCs, dealing with kidnaps, attempted murders, etc.
	The situation for policing in my town is being made worse by the predatory recruiting of the Metropolitan police.
	The Minister generously said that some local problems ought to be solved by broad discussion. He responded positively to my hon. Friend the Member for Reading, West who actively supports the campaign, so when he replies to the debate will he take on board proposals to deal with the waste of public money that occurs when one police force invests in stealing trained officers from another force?
	I am of course aware that some officers will for life reasons want to leave Slough and move to the Metropolitan area. That is fine, but I do not approve of bounties and targeted recruiting. Will the Minister consider stopping the Metropolitan police and other forces spending public money on bounties and on ringing and texting serving officers in other forces? Obviously, they should provide information about posts, but aggressive marketing and recruitment is inappropriate.
	Will my hon. Friend consider the imposition of a transfer fee if officers transfer to another force after training, whereby the receiving force would recompense the sending force for the cost of training the officer? Public money is used for that training, and transfer fees could make a huge difference. Perhaps future settlements could reflect the number of officers trained in a particular area but who transfer elsewhere. I take Sir Ian's point that the Met has traditionally been an exporter of officers, so it might benefit from that proposal as much as areas such as mine.
	Finally, will my hon. Friend look at the cliff faces in police pay that still occur? I was grateful that the campaign that we ran after the 1997 election resulted in area allowances in places such as Slough, but there is still a substantial pay gap between Slough, which is similar to the Metropolitan police area, and the Met. The situation will be made substantially worse, because although terminal 5 will be policed by Metropolitan police officers it will be on the doorstep of my constituency. A number of officers will be attracted by the idea of completely indoor policing, as well as the extra money and firearms training that will accompany it.
	There are real challenges, which are not the result of Government policy but have arisen from the way that we deal with the boundaries of our localised police forces. The Mayor of London keeps asking me why Slough does not join London, and there are moments when I think that that would be the right thing to do. One such moment is when I look at the pay of our local policeanother is when I look at our local transport servicesbut if the Minister could respond to proposals for transfer fees for our police, the option of joining London would look less attractive.

Ian Taylor: The Minister was benign and positive during his opening speech, and we were grateful for that, although he reverted to his more usual acerbic self during later interventions. It is perfectly reasonable to say that policing in general is of a high standard and that not everything has gone bad.
	In my constituency, which is in the borough of Elmbridge and thus in the county of Surrey, the police have a good record. Surrey police work hard and effectively, often in difficult circumstances, and I pay tribute to them and to Inspector Yearwood, who is based at Staines but covers north Surrey and, therefore, my constituency. They do an effective job in often stretched conditions. Policing has other impacts locally, not least through co-operation with the volunteers who man two police stations in my constituency and with the neighbourhood watch.
	I do not want to paint a bleak picture. Surrey is a safe county. The crime statistics have shown one or two worrying signs recently, but by and large, Surrey is one of the safest counties in the country and we want to keep it that way. Keeping Surrey safe means having an effective and well resourced police service, which is where some problems begin to emerge and where I pick up on some of the points made by the hon. Member for Slough (Fiona Mactaggart).
	Part of my constituency used to be in the Met. Under the Labour Government, co-termination of boundaries meant that Cobham, Claygate and related areas in that part of the constituency left the Met and came under Surrey police. For a while, there were transitional payments, which helped. There was also some assistance for Met officers who wanted to transfer to the Surrey force, which was welcome because we received extra resources. However, the Minister should not ignore the fact that now that the transitional arrangements have ceased there are considerable problems. I shall take advantage of the speech made by the hon. Member for Slough and refer everybody to her remarks. I know about the problems and tensions she described, because our area, too, borders on the Metropolitan police area.
	Of course, some serving Met police officers live in my constituency. One of them recently drew attention to the fact that the Met police would have responded much more quickly to some of the local incidents in Surrey. I am not being critical of Surrey police, but we are beginning to worry about stretch and the ability to respond to emerging pressures.
	We have an excellent chief constable, Bob QuickI am not saying that just because he is giving me lunch on Friday, but because there are undoubtedly problems and he is trying to deal with them. He is attempting to adjust services to the problems we face, which is not easy because the public like to see police on their streets. They have adapted to, and now admire, police community support officers; indeed, they expected more PCSOs. However, unfortunately, because the Government have reconfigured some of the budget for the current year, we will receive not the 1.7 million for CSOs that we were expecting but only about 450,000, which means a net reduction of 107 officers. I do not know how many CSOs there will now be in my constituency, but obviously the reduction will mean rationing in Surrey. In places such as Cobham, we have become dependent on the work of CSOs and we were expecting another officer. I paid tribute earlier to the work of the neighbourhood watch and the volunteers at Cobham police station, but they depend on CSOs, so if there are to be fewer of them I want to know how the Minister will protect the county of Surrey.
	The Minister is obviously a master of the funding formulae, but that does not mean that they are rightonly that he understands what they are at the moment. The problem for Surrey is that the formulae are not right. Our county borders on the Metropolitan police area, but we have major road conurbations and supplementary policing responsibilities at Heathrow and, at the other end of the county, extra responsibilities for Gatwick. There are terrorist implications and the police have to respond to that situation and maintain awareness. There are extra pressures when there are special events.
	In addition, we had the merger considerations with Sussex police. I advocated that the merger should be aborted very early on, but in fact it was aborted very late. The figures are rather interesting. I hope that the Minister will listen to this, because he gave me what Surrey police called an obfuscating answer in the recent oral questions session in the House. The total cost to Surrey of the aborted merger was about 811,000. That included manpower costs; it is higher than the figure that the Minister will have, which is about 560,000. The grant to Surrey police from the Government is about 100,000. There is a shortfall. These things are cumulative.
	The Minister has already acknowledged to me that the police precept in the county council tax contribution in Surrey is just under 50 per cent. That will soon rise, but over the next three years the underfunding of Surrey police that is estimated by both the police and the police authority is about 18.2 million. There are no ways in which further efficiency gains can be found. Surrey police have already found efficiency gains that exceed the Government's target. The Government wanted a 5 million efficiency gain; the police have achieved about 8 million.
	The Minister has to understand that there are severe problems in Surrey that are not necessarily evident. It is inexplicable that Surrey does so badly in relation to the other shire counties. The per capita figure is about 89 and the average is about 107. I do not want him to come back to me with the fact that there are 14,000 more officers compared with 1997.
	I am not saying that everything that the Government have done in relation to policing is bad. I am saying that we are dealing with some serious problems now. In my view, those problems derive from the fact that, given its geographical position, a county such as Surrey has stresses and strains that are not recognised by the formula. Surrey has problems in raising further money from local people to fund its police force, not least because council tax increases will be capped at 5 per cent. anyway, even if the people of Surrey wish, in a fit of generosity, to pay more council tax. There are issues in relation to the organisation of the police force, not least its proximity to the Met and that fact that policemen and women make a comparison with people who happen to work for the Met but live near them.
	All those things cumulatively can be thrown out of gear by big problems that might emerge, such as the EU heads meeting at Sandown Park, which happens to be in my constituency. We also get big criminal trials. In one case, there is not a trial but a continuing inquiry into the tragic murder of Milly Dowler several years ago. The culprit is yet to be found. There is also the evident problem that a lot of the crimeparticularly the more violent crimein Surrey is carried out by criminals who come across the boundary from London and then go back again. I ask the Minister please to think of Surrey sympathetically and to be constructive in his responses.

Mark Tami: I welcome the increase that we have seen this year. Clearly, we would like more. I am sure that every hon. Member wants more for their area. However, the 76.3 million in general grant that North Wales police will receive will be an increase of some 3.6 per cent. or 2.6 million over the previous year. I stress that that is an increase. It is not a cut, a reduction or a decrease. It is not less, but more. The inflation-plus increase this year builds on the extra investment of previous yearsinvestment that has resulted in a dramatic increase in policing and in support staff. At the start of the financial year in 1997, there were a total of 1,367 police officers in North Wales police. By 2006, their numbers were about 1,600. That is an increase of about 18 per cent.a higher increase than that experienced in many other parts of England and Wales. There has been an even greater increase of nearly 100 per cent. in support staff. Numbers are up from 533 in 1996 to 997 in October 2006, as my hon. Friend the Member for Vale of Clwyd (Chris Ruane) pointed out. There are now 58 community support officers. That will rise to more than 240.
	Those extra resources have certainly produced results. There has been a fall in crime and, importantly, a greater police presence on the street, which I am sure that hon. Members would agree is what they want and certainly what the general public want. Clearly, we still have a long way to go before we have a police presence on every cornernot that we ever didbut we are making good progress in the right direction. The introduction of community beat managers has been a major success in putting police where they should be: at the heart of local communities. I can certainly testify, as my hon. Friend the Member for Slough (Fiona Mactaggart) has also said, that the number of people coming to see me to complain about a lack of police presence has gone down compared with when I entered the House, although we have a long way to go.
	The investment must be sustainable and long-term. Budgets need to be planned accordingly. That is key. Finance is gathered not only from central Government, but from the council tax payer. The council tax payer has certainly made a sizeable contribution. In 1996, the police precept on a band D house was 46.21 in north Wales. That has now risen to 166.89. The increase in the police share of council tax has been in excess of 273 per cent. The response from the chief constable of North Wales to this year's increaseI again stress that it is an increasehas been to claim that his budget has been cut and that 120 jobs will go this year, with further job losses in future years. To head off that situation, he wants council tax payers to pay an increase in the precept of some 12 per cent. A point has been made about the inflation rate in the police force, which he claims to be 6 per cent., although, as has been said, I think that that has now fallen to 5 per cent. However, 80 per cent. of police costs are salary costs, which are running at around the 3 per cent. level. The inflation rate of the remaining 20 per cent. of costs must be staggering.
	I am sure that we could all argue about those issues long into the night. I know that I can speak for other colleagues in north Wales when I say that we feel that we have on many occasions. However, there is a more serious issue that arises and that is at the heart of the whole funding debate. It gets to the heart of the problem in north Wales. The Home Office grant provided this year was delivered at the level that North Wales police expected. It was not less than they expected. If we examine the figures from previous years, a similar picture arises. The figures are produced by North Wales police, not by me or the Home Office. In 2004-05, North Wales police anticipated an increase in the grant of between 2.2 and 3 per cent. They got 2.7 per cent, within the expected band. In 2005-06, they anticipated an increase of between 2 and 3 per cent. They got 3.85 per cent., which is considerably above what they were expecting. In 2006-07, they expected an increase of between 2 and 3 per cent. and they got 3.1 per cent. One would be hard pressed to argue that the Home Office has failed to meet the expectations of North Wales police.
	If we look at the council tax precept, however, we see a somewhat different picture. Again, the figures are produced by North Wales police. In 2004-05, North Wales police expected an increase in council tax precept of between 23 and 25 per cent. They received 19.4 per cent., which is still a dramatic increase. In 2005-06, they expected an increase of between 14 and 16 per cent., but received 4.86 per cent. In 2006-07, they expected to receive between 10.5 and 12 per cent. and received 5.67 per cent. It is clear to me that their expectations from the council tax precept have been wildly unrealistic, not just this year, but in many years in the past. In addition, the Welsh Assembly Government have made it clear in the last few years that they will cap increases that they think are excessive at around the 5 per cent. figure.
	Why, we must ask, have North Wales police been producing budgets that they know they do not have the funding to meet? Why have they recruited officers and staff in the knowledge that they do not expect to have the funding to meet their ongoing cost? At best, it is brinkmanship to bring about extra funding, or, at worst, it is mismanagementit is probably both. Even if North Wales police are doing such things with the best of intentions of receiving extra resources, they are playing with employeesofficers and support staffwho are doing a good job for the people of north Wales. Worry about the financial management of North Wales police is also caused by the situation involving the general reserves, which are predicted to fall to 1.4 per cent., which is well below the 5 per cent. guideline figure.
	If North Wales police have to examine their expenditure, they will find many areas on which they could cut back. It is important that such cuts do not fall on front-line policing. Cutting support staff is not the answer either, because letting support staff leave only to replace them with front-line officers is neither a sensible nor a cost-effective approach. Again, we are seeing an element of brinkmanship.
	I will not go into great detail on how North Wales police could cut back, although I am tempted to do so. However, I will give a few illustrations of where cuts could be made. The publication Y Glas is sent to every home in north Wales and has included such vital information as a poem in praise of the chief constable. The latest edition informs us that John Nettles will be filming Midsomer Murders in north Wales. Although that is very interesting stuff, the money that funds the publicationsome 200,000could probably be better spent on front-line policing. I am pleased that the police authority has acted on that.
	The chief constable wants to take forward mounted police at a cost of about 300,000, although that money could be better spent. The fleet of Mercedes cars has been extended to further grades. The police uniform has been changed to black and now includes a baseball cap. In addition, the force failed to take up the first tranche of money for CSOs, and the chief constable and his colleagues have blogs, which are translated, that have cost more than 4,500 to date. Of course, opinion and research companies have been employed to point out that people are crying out to pay even more council tax than they do at present. There was also a famous inquiry costing 82,000 over a leaked document from the police authority that resulted in members of the police authority being DNA tested. I could go on.
	Whatever the arguments and counter-arguments about the present difficulties, we need to maintain front-line policing. As hon. Members on both sides of the House have said, we need to find a position that is sustainable not just now, but in the future. North Wales police have received substantial increases in funding from both central and local government. The funding has produced good results and we need to carry on the work. If the situation is sustainable, we will be able to build on the great success that we have already achieved.

Tony Baldry: Policing is probably one of the mostif not the mostimportant issues to our constituents. For Cherwell community partnership, which is made up of Cherwell district council and all the other local councils and agencies, making Cherwell a safer place to live is the lead priority.
	I endorse the comments made by the hon. Member for Slough (Fiona Mactaggart). There is considerable frustration about the number of police officers who train in Thames Valley, but then transfer to the Met. The hon. Lady did not mention the double whammy that because the Met provides those officers with transport costs, they can continue to live in the Thames valley and travel free to the Met area. There is an additional unfairness for parts of the country such as mine because police officers tend to get drawn from places that are perceived to be quieter, such as north Oxfordshire, to areas of high stress, such as Oxford, Slough and Reading.
	The hon. Lady, like me and every other Member for the Thames valley, would have received yesterday an e-mail from Sara Thornton, the excellent acting chief constable of Thames Valley police, which said:
	the financial outlook is very severe ... ACPO and APA have produced a number of forecasts which make it clear that without additional funding or changes in current policy and priorities there will be a significant and increasing gap in police funding over the CSR period ... Over 80 per cent. of the Police budget is accounted for by officer and staff costs and the real worry is that this gap will only be closed by a loss of officer numbers ... The Thames Valley budget for next year ... as it currently stands with a 4.99 per cent. increase in Band D Council Tax and nearly 7 million cut from support costs ... is balanced. I have been able to do this by taking money from Headquarters functions and have therefore avoided cutting frontline operational officers. I very much doubt that we will be able to do this again next year. Indeed the draft revenue estimates for 2008/9 suggest that there is a 20 million increase in budget needed and only a 5 million increase in revenue support grantclearly some very hard choices will have to be made next year.
	The acting chief constable is clearly not alone. It is not like Thames Valley police is somehow out on a limb. Ken Jones, the president of the Association of Chief Police Officers, has said:
	To maintain ... high standards, the Government must maintain sufficient levels of funding. Demands on the police service mean that, although the 3.6 per cent. funding settlement for the service remains above inflation, our expenditure increases at a far greater rate, a fact that must be reflected in our financial allocations.
	In response to the Government's grant settlement, ACPO expressed concern about the lack of projection for the next financial year and fear that the grant level could be as low as 2.7 per cent. I think that it could be even lower than that because all sorts of pressures on the Home Office, such as the need for prison building and to deal with asylum seekers, could well drive the figure down lower.
	As the head of the ACPO finance committee, the chief constable of Gloucestershire, says:
	The settlement ... gives us no firm foundation for the future ... Many authorities will just about be able to get through next year, but unless there is some guarantee of funding for the future it will only be a matter of time before the cuts become cumulative, with consequent decreases in service levels.
	The Minister said in his speech that he did not want to restrain police authorities by flatlining them, but I genuinely do not understand how, if revenue support for police forces is flatlined over the next few years of the comprehensive spending revenue, we will see anything other than a serious reduction in the number of front-line officers. I predict that when this debate takes place next year, considerably more hon. Members will wish to participate because the cuts on front-line services will have started to bite.

Anne Milton: Does my hon. Friend agree that front-line staff play an absolutely crucial role not only in combating crime, but in reducing the fear of crime, which is a major concern to residents in Guildford?

Tony Baldry: My hon. Friend makes an excellent point. Whether in Guildford, Banbury or Bicester, the fear of crime is best dealt with if people are confident that there will be police officers out on the streets.
	An article in  The Observer on 14 January with the headline Police funding crisis 'will put public at risk' said that the Police Federation, which represents Britain's police officers,
	claims 999 calls will take longer to answer and that the number of fully trained officers will be reduced.
	That concern is shared by the acting chief constable of Thames Valley police, chief police officers across the country and rank and file police officers, as represented by the Police Federation. Ministers must confront the Treasury and make it clear that if they do not receive a year-on-year increase in funding there will be a cut in front-line funding. The Minister said that police forces must become more efficient, but funding has flatlined and police forces have to cope with ever increasing demands. For example, the witness protection provision of the Serious Organised Crime and Police Act 2005 came into force in April 2006, and administrative support is required to manage the scheme. The nature of major crime is constantly changing, and police forces have to apply the national intelligence model, and are engaged in counter-terrorism initiatives. Alternative criminal tactics require additional resilience and resources. More work is done in organised crime units, and the Thames Valley force requires a new team of appropriately vetted and highly professional intelligence practitioners to set up a confidential unit.
	There are ongoing demands on police forces, which are ever more sophisticated in their response to major crime, specialist crime and, as we have heard, the increased terrorist threat. I fully endorse and support what my hon. Friend the Member for Arundel and South Downs (Nick Herbert) said. Our complaint is that the Chancellor of the Exchequer made a serious error of judgment when he decided early this year to freeze the Home Office budget until 2011. He effectively announced that policing and security were not a priority, creating considerable difficulties for the police. This year, there has been an increase in the Thames Valley police budget of 4.62 per cent. If the budget is to stand still, next year a 5.94 per cent. increase is required and a 4.3 per cent. increase is required in 2009. Something must therefore give, and I suspect that it will be front-line policing and PCSO provision, on which a promise was made but never quite delivered. The 2005 Labour manifesto pledged to deliver more than 24,000 PCSOs, but no sooner was the print dry than the Home Office reneged on its word, and reduced the national number to 16,000 without adequate explanation.
	In the Thames Valley, 675 PCSOs were originally promised but, in fact, 417 will be recruited, so there is a shortfall of 258. Even worse, district and parish councils are increasingly told that if they want PCSOs they must provide match funding. In effect, they must pay for PCSOs twice, through the police grant and through the district council or parish precept, even though the amount of funding for the police from council tax has increased substantially. In 1996-97, almost 85 per cent. of police force revenue was financed directly by the Government, but that percentage has fallen substantially, and it is about to go down to 60 per cent. in 2006-07. Council tax accounts for 21 per cent. of police fundingup from 12 per cent. in 2001-02so a stealth tax has been levied, as more and more burdens are imposed on local people and the amount of money paid by the Treasury and central Government has decreased.
	The Minister kindly said that he would meet the hon. Member for Reading, West (Martin Salter) and my hon. Friend the Member for Buckingham (John Bercow)I hope that he will extend that invitation to me, as I represent an Oxfordshire constituencyto discuss funding for the Thames Valley force. He suggested that he wanted to engage in a process. This is an extremely important subject, and we all want to engage in the process of trying to ensure that over the next two or three years our police forces are properly funded without cutting the number of front-line police officers.

Albert Owen: Police funding in the past 15 years has gone through a number of different phases. It has gone from famine under the Conservative Administration to a feast in recent years. Every feast is always followed by a diet, and we are in that position now, as people have to tighten their belts and manage their budgets more responsibly.
	In the past 10 years, the performance of North Wales police has improved considerably, and the force's detection rates have increased faster in the past four to five years than those of many other areas. The north-west Wales division, which covers my constituency of Ynys Mn, is one of the best performing divisions in the United Kingdom. Like many hon. Members, I have regular meetings with the chief superintendent and local inspectors, who point to advances in community policing such as the neighbourhood policing teams that have won the trust of the communitysomething that has been missing for many years. The Government have an excellent record of funding community policing. In 1996, there were no community support officers at all, but in north Wales, we now have 58 CSOsa figure that will rise to 240.
	PCSOs have made a real difference. North Wales police missed out on the first tranche of funding, because the chief constable suggested PCSOs could not do the job that he wanted them to do. That is certainly not the case, and he has changed his mind, but we have lost out on valuable Home Office money. That money was left unclaimed, but there are complaints now that that there is insufficient money from the Home Office. Good police performance in north-west Wales is the result of the dedication of police officers and, indeed, civilian staff, accompanied by steady increases in Government funding. In north Wales this year, and in 2007-08, there will be a rise in grant of 3.6 per cent., and the area has received a real-terms increase of 33 per cent. since 1997.
	In addition to the increase in central funding, there have been massive increases in the council tax precept: there has been a 53 per cent. increase over the past three years, and a staggering 100 per cent. increase in the past five years. Such increases, as my hon. Friend the Member for Alyn and Deeside (Mark Tami) said, are not sustainable and, indeed, are unacceptable. Police numbers in my area have increased by 18 per cent. compared with the UK average of 11 per cent. since 1997, and we have 1,600 police on our streets. In that period, the number of civilian staff doubled to 997. In the comprehensive spending review, as the hon. Member for Banbury (Tony Baldry) mentioned, the Chancellor made it clear that the Home Office would receive flat-rate increases between 2009 and 2011. It was known well in advance that an average increase of 3.6 per cent. in the general grant would be awarded in 2007-08, yet when it was delivered the police claimed that the Home Office had cut their budget. The general grant increase is worth 2.6 million while total funding is 76.3 million. The police have secured extra revenue from council tax, but resources still do not meet its expectations. Indeed, the police are still considering increasing council tax by between 7 and 10 per cent. per annum. The Welsh Assembly Government have indicated that they would cap increases at 5 per cent. There has been poor budget planning by North Wales police during a period in which there were sufficient funds coming from the Home Office. North Wales police has made some controversial management decisions, some of which were referred to by my hon. Friend.
	In an intervention, the Minister mentioned that he launched the St. Asaph call centre, but I can tell him that the call centre is not working. There are insufficient numbers of front-line staff answering calls, and the centralisation that has taken place in North Wales police has come at the expense of moving experienced and knowledgeable people from different parts of the division to a central call centre. It is a white elephant, and it is sucking front-line staff into it to plug gaps.

Mark Tami: Does my hon. Friend agree that the amount that North Wales police has spent on IT is very high, compared with the amount spent by other forces?

Albert Owen: Indeed. North Wales received specific grants from the Home Office, which it spent well, and that has worked, but the call centre is not working because of the lack of knowledge of the region that it is supposed to represent. Council tax payers have paid for extra policing. Indeed, when the police authority proposed the rises, people were told that they were getting a 10p bobby. They have paid for extra local policing, but the chief constable is now making alarmist statements in the press, saying that he will cut the number of front-line staffstaff for whom people have already paidif he does not get more money from the Home Office. I repeat what my hon. Friend the Member for Alyn and Deeside said: the authority is getting extra money from the Home Office, year on year, and is not facing a cut, as has been suggested.

Ian Lucas: My constituents in Wrexham, north Wales, tell me that they strongly think that a 5 per cent. limit, in relation to council tax increases, is, if anything, too high. Does that agree with the views expressed by my hon. Friend's constituents, and do they feel that the projected increase of 10 to 12 per cent. would be way beyond their means?

Albert Owen: My hon. Friend is absolutely right. We all know that in the 2005 general election, council tax was the big issue. The Welsh Assembly Government have asked local authorities and police authorities to bear that in mind, and to consider inflation, which is at some 3 per cent., when setting the precept. I know that that is the case in England, too.
	My hon. Friend the Minister has met me on a number of occasions to discuss a north Wales issue that is specific to my constituency and that of my hon. Friend the Member for Delyn (Mr. Hanson)port security. The arrangement for funding port security is not clear, and the system was changed in 2006-07 to reflect a new method of payment to the police authority. I talked to the police authority spokesman only yesterday, and it is still unclear how much money is dedicated to port security. The Minister will know that port security is high on the agenda, not just in my area but throughout the United Kingdom. Can he say exactly how much money will be allocated and when, so that we can use it properly in the port?
	Failure to secure extra funding for the port will mean one of two things: either we cut the police presence alongside immigration officers, or we take front-line police officers from the street and put them in the port areas. My constituency has the third heaviest port traffic in the United Kingdom. On average, the number of lorries and the amount of heavy freight is increasing by 2 to 3 per cent. a year, so the amount of traffic flow through the port to the Republic of Ireland and back is increasing. I ask my hon. Friend the Minister to bear that in mind.
	On police authority specific grants, another issue that has caused concern is protective services. I was strongly opposed to North Wales police force merging with the rest of Wales, because it would result in over-centralisation, but one of the issues identified in the mergers debateI think that this point was agreed by everybodywas that there was a gap in level 2 funding across the UK. That is certainly the case in my constituency. North Wales police and other police authorities in Wales have submitted plans to the Home Office, and the Minister is considering them in great detail. I urge him to make a decision as soon as possible. In February, the police authority will set its precept, and I hope that it will discipline itself this year. If the Minister made it known that additional funding would be available over the next few years for level 2 policing, and for port security, it could balance its budget better, and it would have some flexibility.
	To conclude, North Wales police is experiencing pressures, largely of its own making

Chris Ruane: Before my hon. Friend concludes, would he consider suggesting to the Minister that police forces with good records for delivery, like the North Wales police, which has the third or fourth best record on crime in the country, should be rewarded for that good practice?

Albert Owen: I am sure the Minister heard my hon. Friend's plea, which we have made on previous occasions when delegations from north Wales met the Minister. The Minister should take that consideration on board.
	Port security is a priority in my area. I urge the Minister to take it into account, along with level 2 policing. A third factor that the formula does not recognise fully, as I said in an intervention, is the population changes in popular tourist areas such as mine. Small communities with community policing have to deal with double the population and a different type of population in the evening and at night. Will the Minister reflect on that? He said in response to an intervention that tourism was nothing new in the area, but I am proud to tell the House that since 2001 tourism has increased in my area, and the number of people using north-west Wales and other UK destinations has grown significantly over that period. Not everybody is taking advantage of cheap flights abroad. Many are staying in the UK. The formula for police funding does not recognise that fully. I urge the Minister to give extra attention to those three aspects of policing in north Walesport security, level 2 policing and tourism.

Tony McNulty: When Ministers say that we have had a good debate, they often do not mean it, but I do mean it. The debate has given Members the opportunity to air local concernsI accept that, as the hon. Member for Banbury (Tony Baldry) said, policing is, rightly, a hugely important local issueand to make more general points about the processes, the formulae and all the other elements of the settlement. In that sense the debate has been good and focused.
	The hon. Member for Banbury is also right to sayit is jargon now, and I do not remember when the expression was first coinedthat the broader issues of finance and policing in our communities are a process, rather than an event. That seems to apply to most things these days. Although many contributions focused on the specifics of the immediate settlement and its consequences for individual communities, many hon. Members, not least the hon. Member for Esher and Walton (Mr. Taylor), dealt with the broader picture. I do not blame hon. Members for adopting either approach.
	The debate was constructive and represents the start of a wider debate. I do not say that as an abdication of responsibility for the development of public policy on policing. I say that because the subject is important enough for us to have a proper national debate, as I suggested earlier.

Nick Herbert: I am sorry to interrupt the Minister's flow and I am grateful to him for giving way. I agree with him about the need for further debate, especially in view of the funding constraints over the next few years. When he announced the police authorities grant back in November, he said that the Government would publish a vision for policing and a reform road map by the end of the year. Plainly, that vision and reform agenda are needed. Can he tell the House when he now plans to publish them?

Tony McNulty: I will, in all candour. We had hoped that the Association of Police Authorities, the Association of Chief Police Officers and Government consultation processes would all be aligned and would be completed by the end of the year, but that was not possible. ACPO is taking considerable time to reflect on these matters, which it is important to do, and will not be ready until April. The position of the APA is similar, though it may not need until April. To engender the debate, the Home Office will set out in February the broad vision and way forward in terms of the components of reformbroadly, what we need more of and what we need less of.
	Some of the issues that I have not touched on today but which are important were mentioned by Membersunfairly, in the case of the hon. Member for Arundel and South Downs (Nick Herbert)such as the function of the police framework assessment, the police standards unit and other units in the Home Office.
	I want to get to a stage whereby, on the back of good performance, the Government, while of course still measuring that performance, step back more and more in terms of inspection, bureaucracy and telling people what to do in a very prescriptive way and let local forces concentrate increasingly on that while we concentrate increasingly on output. The Home Office statement in February will engender a wider debate with colleagues in the APA and ACPO. In terms of reform and vision, I agree with much of the joint ACPO-APA document on sustainable policing; I could sign up to that tomorrow. I have some concerns about their comments on finance and resources, which I am happy to discuss with them, but I think that many would agree with the overall thrust of the document.
	I am grateful to many Members who talked about the huge improvements in policing that have taken place and made their comments in that context. My hon. Friend the Member for Sherwood (Paddy Tipping), who is not with us at the moment, said that there have been huge improvements in Nottinghamshire although there is a long way to go. He echoed a point made by many other Members: whatever we do of substance in terms of reducing crime and getting more and more police officers on the front line, there is real difficulty in trying to shift the public perception of how safe or otherwise their areas are. The hon. Member for Esher and Walton rightly said that although, compared with many other areas, his area is safewe may want to put that in inverted commas or contextualise itthat is a hard message to get across to many of his constituents, who still perceive it as relatively dangerous or crime-ridden. For the record, my borough of Harrow invariably stands at anything from 30th to 33rd in the crime rankings in London, including the City of London, yet it is still very hard to shift people's perceptionsalthough things are changing with the introduction of the safer neighbourhood teams. That is not for political reasons, but simply because crime is such an important issue.
	Members are right to ascribe to the police the importance that they have in this debate, and I want to dwell on a few of the specific points that have been raised. With the greatest respect, I will not refer to the comments of the hon. Member for Cheadle (Mark Hunter), not least because we heard them all last week in the Manchester debate. I took the opportunity to have a little comfort break at that point, because I knew that it was the only break that I was going to get. I apologise to him for my absence. I am sure that his speech was as excellent this week as it was last week.
	Several Members on both sides, including hon. Friends from the Thames valley, Kent and Surrey, spoke about a situation that arises particularly in relation to the Met and its surrounding forces and to a lesser extent elsewhere. It is a fair point, but I do not have a piece of paper in my pocket to give an immediate response to it. I am not sure whether transfer payments are the answer. As Ian Blair has said, as much traffic goes the other way. I should think that the Met is, at worst, static in terms of imports and exports. Other Members mentioned Greater Manchester and its influence on Lancashire, Cheshire and other forces. However, the incentives offered by metropolitan forces outside London are not of the same nature as the Met can offer. It is worth exploring further the relationship between metropolitan forces with a larger resource base, relatively speaking, than the county forces surrounding them.
	I am sure that the hon. Member for Buckingham (John Bercow) and my hon. Friend the Member for Reading, West (Martin Salter) will be more than happy for my hon. Friend the Member for Slough (Fiona Mactaggart) and the hon. Member for Banbury, to come one, come all for a chat about Thames Valley and its relationship with the Met as regards recruitment and a whole range of other issues. It is certainly a matter worth exploring. By the by, I add to the comments of all Thames valley colleagues about the excellence of chief constable Sara Thornton and all that she is doing in the Thames valley. I wish the authority well.
	I am not sure that I would go as far as to saythough I understand why people say itthat this is all about bribes and predatory behaviour and all those other elements. However, I understand why some of my hon. Friends talk in those terms.
	As a small asideit is germane to the points raised by the hon. Member for Esher and Walton and another Member representing Sussex, though I cannot remember whowe are, in tandem with the Department for Transport and through the Boyce-Smith report, looking at the policing of airports and who should pay for it. That relates to some of the points made about terminal 5 at Gatwick and other issues that impact on Surrey as well as Sussex. We will report on that in due course.
	I am grateful to the hon. Member for Esher and Walton for the way in which he put his case. I have taken into account the point about the peculiarities historic, geographic and otherwiseof some of the south-east forces, which requires further detailed consideration. I do not have all the figures to hand but when there have been specific international events at Sandown or elsewhere in Surrey, with unique policing dimensions, sooner or lateron balance and to be fair to the Home Office and Surreythey have been dealt with. I do not think that the point about proximity to London in that regard means that it has been somehow ill served by the special grant regime. Again, some of the broader points about policing, crime markets and wider points that go beyond recruitment and the whole nexus of London and the surrounding counties, including Essex, were well made. I will try to think positivelyI urge everyone to do the samenot just about Surrey's predicament but about everybody's position as we go forward into what will be, as I have said in all candour, three quite tight years.
	I would say to the hon. Member for Banbury and others who alluded to terrorism that the funding for counter-terrorism has increased fourfold since about 2002to the best part of 0.5 billion. That is not part of the settlement and does not count as money going directly between forces and the centre. It is a grant put on top, so terrorism should be taken out of the equation. That does not mean that points raised about gaps in protective services at level 2referred to by my hon. Friend the Member for Ynys Mn (Albert Owen) and othersdo not exist, but they are starting to be addressed. Quite deliberately, counter-terrorism has been put to one side and needs to be dealt with in a regional, local and national configuration. That is being done.
	The hon. Member for Banbury and others raised another important point, which I tried to write down, about continuing demands being made of our police forces in ever-more sophisticated ways in an ever-changing world. That is absolutely the case. We are trying to address those points in an environment in which growth in resources has slowed down. That is the safest way of saying it, rather than the impression of cut, cut, cut that has been created by some hon. Members. There has been significant growth over eight or nine years. Yes, the rate is slowing and yes, it causes difficulties, but if all things remain the same and we go forward to the year after next, we should be able to address the issues collectively in all substance. It is not simply the point that 80 per cent. or more of funding is in people: if it is nothing more than 3 per cent., how can the inflation rate be described as very exorbitant?
	This issue is also about, to use the jargon, processes, business re-engineering and all the other elements. It is about doing things smarter. It is about more and more civilianisation of custody suites, thus releasing police officers for the front line. It is about, however traduced, doing more on bureaucracy. It is about looking into the Police and Criminal Evidence Act 1984 and carrying out a full review of the Act, taking into account all the paperwork and paraphernalia surrounding the process of an arrest all the way through to dispatching people to the courts. That is about to commence. It is about the balance between summary justice, fixed penalty notices and who goes through the courts. That does not apply in a sharp, black-and-white, That's a dreadful way to do it; do it this way manner, but in a serious fashion. It is about IT improvements such as the greater implementation of Airwave radios and live scan units for fingerprint images. Many exciting, challenging and sophisticated innovations and changes are happening in policing. I therefore believe that many of the efficiencies that we need to continue to secure from policing will come far more readily than would otherwise occur.

Albert Owen: Will my hon. Friend give way?

Tony McNulty: I will not give way, partly because there are only two minutes left and I promised that I would not speak for that long, and also because I do not have the answers about port policing. I will happily write to my hon. Friend.
	I broadly agree with much of what my north Wales colleagues said. They have made the same comments previously. It is important to point out that North Wales receives an extra 7.3 million from the Home Office in special grant to prop up the general grant as well as 1.2 million to cover relocation from South Wales. We are not therefore cutting the money for North Wales police or any other authority in Wales. I have written in terms to the chairman of the North Wales police authority to say so.
	Although the subject is emotive and hugely important, the policefrom the Fed to the supers to the sergeants to ACPO and the APAwould demand that we dealt with policing calmly, maturely and reflectively, thus according it the importance that our communities do. I commend the report to the House.
	 Question put and agreed to.
	 Resolved,
	That the Police Grant Report (England and Wales) for 2007-08, House of Commons Paper No. 207, a copy of which was laid before this House on 18th January, be approved.

Local Government Finance

Phil Woolas: I beg to move,
	That the Local Government Finance Report (England) 2007-08, House of Commons Paper No. 231, a copy of which was laid before this House on 18th January, be approved.

Madam Deputy Speaker: With this we may discuss the following:
	That the Limitation of Council Tax and Precepts (Alternative Notional Amounts) Report (England) 2007-08, House of Commons Paper No. 232, a copy of which was laid before this House on 18th January, be approved.

Phil Woolas: On 28 November, I announced plans to the House for grant allocation to local authorities in England and, following consultation, I am confirming those plans today.
	Before I briefly set out the figures, I should like to remind the House that the Government are now planning local government finances over several years, and that 2007-08 is the second year of a two-year settlement. Later this year, we will announce the first ever three-year settlement for local government.
	Our policy on each year's settlement in a multi-year settlement is to make changes only if exceptional circumstances are revealed by consultation. I shall deal more with consultation shortly. However, in summary, I did not find any exceptional circumstances.

Frank Field: Most local authorities welcome the Government's move from a two-year to a three-year settlement. However, that makes the basis on which the settlement is struck more important. Some authorities, such as the Wirralpart of which I representare protected by the floor that the Government have introduced but are disadvantaged by the failure to phase out the cap on the new formula for social services expenditure. Is the Minister in a position to say that, for the three-year settlement, the damping arrangement will be put to one side and that local authorities, such as the Wirral, will get their full entitlement for social services?

Phil Woolas: I thank my right hon. Friend for raising that point, which he has made forcefully on behalf of his authority and others previously. I understand his point. Two floors operate in distributing the money: the overall floor, which protects councils from sudden decreases in grant, and the floor in two of the three social services funding blocks. The latter exists because of the changes in the formula for 2006-07 and 2007-08. The statement today, as I know my right hon. Friend appreciates, relates to the next financial year. Consultation over the three-year settlement will begin later this year. Obviously, both the policy towards the overall floor and the policy towards damping within the social services block will be given consideration.
	I suggest that the House take heed of the important point that my right hon. Friend makes: although there are many benefits from multi-year settlements, such as councils' ability to know their future finances, there are councils who argue that injustices within the system would be locked in for three years, not one. The debate is therefore an important one.

Frank Field: From what the Minister has just told the House, am I right to assume that the Government have not yet made up their mind as to whether that dumping arrangement [Laughter.] Sorry, I meant dampingwe feel that we have been dumped on; a Freudian slip if ever there was one. Will that damping arrangement be lifted for the new settlement? If the Government are still making up their mind, will we be informed of that before the Minister announces the three-year settlement, or will we learn of the Government's mind only when he makes that announcement?

Phil Woolas: My right hon. Friend is rightly pushing the pointdumping is what the Conservative Government used to do; we do damping.  [Interruption.] The hon. Member for Beverley and Holderness (Mr. Stuart) says from a sedentary position that I am getting a bit political; I apologise. I know that that is not allowed in this place.
	I can refer my right hon. Friend to the statement made in December 2005 and repeated in 2006. We see damping as a permanent part of the system. It would not be right to allow local authorities to have sudden negative changes to their finances. Having said that, we must balance that with the issue of fairness. Having identified a formula for distribution of grant, part of which is based on relative need, the Government must state their view as to what a local authority requires. We intend to consult on the formula distribution, including the damping and the floors, and to make provisional announcements towards the end of the calendar year, subject to consultation over that period. We will confirm decisions at about the same time next year, as we are doing today.
	To repeat the point made by my right hon. Friend, the consultation is extremely important for councils and, therefore, for hon. Members, as the settlement will be for three years. As I have said, unless there are exceptional circumstances our policy is to keep the decisions on grant allocation as they are.

Brian Binley: rose

Judy Mallaber: rose

Phil Woolas: Before I give way to the hon. Member for Northampton, South (Mr. Binley), let me explain to the House why that policy is important.
	We are asking local authorities to deliver services, to provide stability in council tax and to pass on the stability that we provide. We are also asking them to make efficiency savings as part of their financial decision making. Obviously, local authorities have a greater capacity to do that over a longer period of financial planning than simply 12 months.

Brian Binley: The Minister is always generous, and I recognise that. He will know that there are exceptional circumstances in Northamptonshire, not least because the figures used for growth from 2001 to 2008 were mistakenly accepted, as has been acknowledged. Equally, does he recognise that our revenue support grant has been well below the rate of inflation over the past two years, and that we have made savings of 45 million and 41 million respectively, including 1,030 full-time equivalent cuts in staff? We face similar problems in 2008-09, but we have been cut to the bone. Will the Minister look specifically at the mistake in population projections made by the Office for National Statistics, and view us as an exception? We desperately need his help.

Phil Woolas: I thank the hon. Gentleman for his kind words. I shall try to deal with his point about population figures in a moment. First, let me say that the decision on distribution is on how to allocate a certain pot of money between councils, and what benefits one council will be to the detriment of others. During the consultation, a number of councils argued that they are unique; logically, of course, it is not possible for more than one to be unique.
	The hon. Gentleman made a serious point about growth. It is important to recognise that authorities face extra costs as a result of growth in terms of both revenue and capital, and that capital in particular can be lumpy in placing demands on authorities. In the two-year settlement, we changed the method of calculation of population to take account of future projections rather than simply relying on historical trends. A number of authorities had asked us to do that.

Jim Cousins: rose

Judy Mallaber: rose

Phil Woolas: I will give way first to my hon. Friend the Member for Newcastle upon Tyne, Central (Jim Cousins) and then to my hon. Friend the Member for Amber Valley (Judy Mallaber), to whom I am sorry I did not give way a moment ago.

Jim Cousins: Between 2000 and 2004, Newcastle was the most rapidly growing of all the neighbourhood renewal fund-supported authorities. The population projections that the Minister is using as a basis for grant distribution reflect previous years of decline rather than the years of growth around 2003-04. As a result, in comparison with the real population of the city, they are out by some 13,000. Those extra 13,000 are a young, transient population who place particular demands on the resources of the city council. Can the Minister not see a way of putting the error right?

Phil Woolas: That point has been made by my hon. Friend's local authority, and by council groups across the political spectrum. The population figures will never be fully up to datethere must be a cut-off point, and there will of course always be future allocationsbut I reassure my hon. Friend that allocations within a multi-year settlement reflect the population trend. As I have said, we made changes to ensure that that happened.
	I should also sayto the House in general, rather than to my hon. Friend in particularthat notwithstanding the large number of representations I have received from local authorities arguing that their populations have risen, I have yet to hear from a council saying that its population has fallen. It is of course possible that no council has a population that is falling.

Jim Cunningham: rose

Phil Woolas: Has my hon. Friend found one?

Jim Cunningham: I do not think that I have, but I thank my hon. Friend for giving way. May I ask whether his formula and his population calculations take account of any allowances for refugees or asylum seekers in some of our major cities?

Phil Woolas: That is an important point, but perhaps it is best if I apologise to my hon. Friend the Member for Amber Valley and give way to her, as I said I would. I shall deal with the population calculation methodology later, if I may.

Judy Mallaber: I thank my hon. Friend. May I return him to the earlier discussion of floors and ceilings? As he will know, ever since I entered the House we have argued vehemently about Derbyshire's being one of the relatively underfunded authorities. I welcome this year's 5.8 per cent. increase for the county councilit is one of the authorities that always gets the top performance ratingand the 5.2 per cent. for Amber Valley. We have closed the gap considerably, but will my hon. Friend reassure us that we will continue to close it in decisions on floors and ceilings in future settlements?

Phil Woolas: I thank my hon. Friend for making that point and for her acknowledgement of the grant increase. It might be timely to remind Members that all local authorities have now received above-inflation grant settlements for 10 yearsa point that the Local Government Association has made.

Several hon. Members: rose

Phil Woolas: Will Members allow me to answer the question that has been asked before I take an intervention on a different point?
	The ceilings have been abolished, which has been welcomed by the authorities that benefit. The calculations that go towards deciding the grant allocation include the resource equalisation calculation as well as others, such as the relative needs formula and per capita calculations. Many councils argue that that creates an unfair advantage, which is why changes were made for the settlement. However, I emphasise to my hon. Friend that the settlement that I am confirming today was announced more than a year ago, and that I am simply delivering what local authorities asked of the Government in the consultation

Several hon. Members: rose

Phil Woolas: Let me emphasise the point that I am making. Local government welcomed multi-year settlements. There is strong support for such settlements across the political parties.

Susan Kramer: I thank the Minister for giving way. I want to correct his statement that every council has received above-inflation increases. Is he aware that the 2007-08 grant to Richmond upon Thames council has been cut by 79p per head? That is partly because of a population issue, but it is also because of the change in the way that the base figure is calculated and the way that capital expenditure is put into that. That authority receives the least money; it has the lowest grant in all of London, and the gap between it and the next authority is 60.30 per head. Although its grant is far less than that of every other authority in London, it has had a cut for the coming year.

Phil Woolas: Perhaps I am just getting middle-aged, but the ingenuity of the arguments that Members employ to claim a special case for their authorities never ceases to amaze me. I acknowledge that the hon. Lady is standing up for her area of Richmondwhich I think has recently been in the news because of its policy on four-wheel drive vehicles.
	Let me correct the hon. Lady's point. She is referring to the allocation of grant following the changes in the baseline. When any Government allocate grant on a formula basis, they have to do so on the basis of a like-for-like comparison. A number of local authorities, especially in London, made the point in consultation that the allocation appears to be lower in cash grant in some cases, such as when an authority is, so to speak, on the floor at 2.7 per cent.and I am fairly sure that the hon. Lady's authority is a floor authority. That appears to be the case because of the like-for-like comparisons year on year. The authorities that have argued that the actual grant is not as much as it appears to be on paper make a point that would be fair if in alternative years, when the like-for-like comparison gives them more than the allocation appears on paper, that sum were returned. I have yet to hear that offer being made.

Jeff Ennis: I am sure that the Minister agrees that the formula-funded mechanism that we inherited from the previous Government was unfair to many local authoritiesparticularly metropolitan authorities. As my right hon. Friend the Member for Birkenhead (Mr. Field) has already explained, the children's social services damping mechanism is having an adverse effect on many metropolitan authorities. Let me give the example of the two authorities that I serve. Barnsley is losing out to the tune of 9.9 million, and Doncaster to the tune of 9.5 million. Can the Minister clarify the stance that his Department will take next year, when we review the damping mechanism? Can he give an assurance that his Department will give active consideration next year to reviewing the damping mechanism, with a view to making it fairer to all authorities, specifically metropolitan ones?

Phil Woolas: I think that I can give a commitment to making the mechanism as fair as possible; however, I am not sure that making it fairer for a specific group of local authorities is consistent. The serious answer to my hon. Friend's question is yesit is incumbent on the Government to do that, in recognition of the points that have been made across the spectrum.

Edward Davey: rose

David Taylor: rose

Phil Woolas: I will take an intervention first from the hon. Member for Kingston and Surbiton (Mr. Davey) and then from my hon. Friend the Member for North-West Leicestershire (David Taylor). I will then need to move on to my statement, in order to allow the hon. Member for Brentwood and Ongar (Mr. Pickles) and others to make their points.

Edward Davey: I am grateful to the Minister for giving way. He said a few moments ago that the Government have given a real-terms increase to every council in the country, but in replying to my hon. Friend the Member for Richmond Park (Susan Kramer), he gave the game away. He made it clear thaton looking at the cash increase, by whatever method of analysissome London boroughs have had less than that. In my case, Kingston had an increase of just 1.9 per cent. The retail prices indexthe inflation indexis running at 4.4 per cent. What inflation index is the Minister using for the real-terms increase that he says he is giving to every council in the country? Such an increase is certainly not coming to the royal borough of Kingston.

Phil Woolas: I did not say what the hon. Gentleman says that I said; I said that councils said that they were not getting that increase. I am simply making the obvious point that, if we make a like-for-like comparison over the period in question, what I have said is correct. I will give the hon. Gentleman the figures for his local authority if he wants me to. In the case of Richmond, the average increase in formula grant over the 10-year periodover which it is possible to iron out the like-for-like ups and downsis 3.7 per cent. Although the councils of the hon. Gentleman and the hon. Member for Richmond Park say that there is a reduction this year, that simply reflects the change that has been made over the period. Perhaps I should now stick to my word and take an intervention from my hon. Friend the Member for North-West Leicestershire.

David Taylor: I am grateful to my hon. Friend for giving way. Sadly, Leicestershire had the lowest grant increase of all 150 upper-tier unitary authorities0.6 million, or 0.8 per cent. Why was that so? Well, the Minister talks about like-for-like adjustments, but in our case the transfer of supported capital expenditure was based on 2005-06, when there was a significant spike of almost 13 million in capital expenditure because we were replacing a number of schools, one of which is in my constituency. Can Leicestershire be treated in the same way as Norfolk and Lancashire, both of which had their spikes removed? Norfolk's figure was reduced to 56 million from 71 million, and Lancashire's was reduced to 32 million from 36 million. Such an approach does make a difference. We are grateful for what has happened, but our increase remains very low, compared with other unitary and upper-tier authorities.

Phil Woolas: I of course recognise the point that my hon. Friend makes about the treatment of capital and the building schools for the future programme in those cases. I will deal with that issue in a moment, because it has caused concern and some confusion among the local authorities affected.
	I want to emphasise that the policy on multi-year settlements is to make changes only in exceptional circumstances, and if those circumstances are revealed by consultation. The stability and predictability that that approach brings are very important for public financesmore important, in my opinion, than tiny differences in marginal grant increases, and more important even, I venture to suggest, than arguing over the minutiae of some of the grant formula. More widely, stability is vital to enable authorities to plan jointly with local service delivery partners, agree objectives for their area, and deliver them. So I am very happy indeed to be able to say something that is so expected and predictable.

Susan Kramer: Is the Minister conscious that because the NHS is under pressurefor instance, Kingston primary care trust has a significant deficita significant amount of cost shunting is going on in many local authorities between partners? That shunting is moving costs on to local authorities which are attempting to keep up even minimum levels of service. The partnership strategy that the Minister mentions is operating in reverse at present.

Phil Woolas: I had spotted the point that the hon. Lady makes and I was aware of that. The PCTs are one of the major partners, if not the major partner, of local authorities in the delivery of local area agreements. Therefore the alignment of financial periods and spending decisions, both revenue and capital, is very important. It follows that it is essential that the partners work in partnership. I acknowledge the point that in some instances the financial decision making of the local authority and the primary care trust can be out of kilter, but the local area agreement process that we have introduced allows the council and the PCT to work together, and the previous regime did not. The second and more important point, which the hon. Lady must surely acknowledge, is that it is incumbent on the PCT, as it is on the local authority, to balance their books. There is little point having financial stability and predictability if one is simply building up a deficit in one's accounts. Against the background of increased resources, it is surely rightit is surprising that the hon. Lady disagreesthat PCTs and councils should balance their books.

Brian Binley: The point I was making about 2008-09 is that local government reorganisation will cost councils in those years. On top of that we have the growth agenda and on top of that we have the mistakerecognised by the Governmentthat there will have been no growth in Northampton between 2001 and 2008. All those factors come together at a time when we are trying to put into effect single status, because it was neglected before. That is a massive amount of additional expenditure and I want the Minister to recognise the accumulation of problems that we face.

Phil Woolas: I give the hon. Gentleman the assurance that local government reorganisation will not take place at the expense of the council tax payer. Unless there is a proven case that reorganisation will save money rather than cost money, it will not go ahead. I hope that he is reassured by that. I note that he said that the reorganisation was what his local authority wanted. I repeat for the record that it is not my proposal.
	On total grants, I confirm that the Government will provide for 65.8 billion in 2007-08, an increase of 3.1 billion or 4.9 per cent. over 2006-07. Within that total, formula grant, which we are debating today, will total 25.6 billion in 2007-08, an increase of 3.7 per cent. All of the increases that I have quoted are on a like-for-like basisthis is the important point that the House has just been debatingas they are adjusted for changes in function and financing. That is an important point, because several of the representations that I receivedI suspect that the same applies to hon. Memberswere on that point.
	I shall expand a little further. A simple cash difference in the amount of grant that an authority receives from one year to the next is no doubt a useful figure, but it is not the whole story. That is because from one year to the next we may ask local government to take on a new task, or drop an old one, or to transfer the financing for an existing function to a different body or a different financing route.
	To take the most dramatic example of recent years, the introduction of dedicated schools grant from 2006-07 meant a large reduction in cash terms in the formula grant received by education authorities compared with the previous year. However, that would not have been a sensible comparison, because previously they were also receiving DSG, so we adjusted the comparison for formula grant purposes to reflect that.
	This year, the main adjustment is for something rather less obvious. When we introduced multi-year settlements, we needed also to make changes in the way support for capital expenditure is provided. Any allocations that needed revenue support through the formula grant needed to be made in advance, so that we could calculate two years' worth of formula grant. However, some capital programmes are not so predictable: for example, when expenditure is inherently lumpy with large projects, or funding is based on a bidding process. So those programmes were switched to being supported by the Government with a direct capital grant.
	The effect of that, financially, was to move the burden of borrowing from councils to the Treasury. Resources that were previously included in the local government settlement to help support borrowing were therefore transferred to the Treasury.
	To reflect that financing change, we recalculate the prior year2006-07 in the case of the settlement that we are debating todayas though the transfer for 2007-08 had already happened. A number of councils objected to the resultant reduction in their base position and, therefore, to the fact that their cash increase from year to year was less than the adjusted, like-for-like increase.
	I believe however that councils could hardly object to the underlying principle of adjusting since, if funding were transferred into the settlement, it would give authorities on the floor a larger increase. As I told my right hon. Friend the Member for Birkenhead and my hon. Friend the Member for Barnsley, Central (Mr. Illsley), I am certainly prepared to look again at the way in which the grant floor operates from 2008-09 onwards, but I will not change the basis for 2007-08.

Eric Pickles: The Minister has been very kind about giving way, but I seek clarification on a technical point. The Chancellor's spending review will have an effect on the move to three-year settlements. I presume that some priorities will be changed, with knock-on effects on the various spending blocks, and that the Minister will introduce dampening mechanisms involving ceilings and floors to cushion those changes. Will he be able to oblige local government by giving a description of those mechanisms a little earlier than normal?

Phil Woolas: The hon. Gentleman raises an important and fair point. As I said earlier, moving to multi-year settlements means that we must make a special effort to look at all the relevant circumstances, and the consultation timetable is being considered at the moment. My policy is to ensure that the spending period of a local authority is aligned with the Treasury's and also, as far as possible, with the financial periods of its local government partners in the local area. Moreover, that alignment will be reflected in special grant allocation so as to provide a stable framework for public finance. It is too early to give the hon. Gentleman a straight yes in answer to his question, although I acknowledge that it is a valid one to ask.
	Councils are understandably keen to get hold of information on the capital grants that will have taken the place of supported borrowing in 2007-08. Some allocations for 2007-08 have been announced but others, mainly bid-based programmes, are not able to work to that deadline. I undertake to keep the latest information on our website, as happens with other revenue grants.

David Taylor: My hon. Friend the Minister acknowledges the impact that atypical capital expenditure, especially in connection with school replacement, can have on the calculated grant increase, but I hope that he will explain a little more about his rationale, either now or in writing. For example, Walthamstow, Knowsley, Solihull, Newcastle city and Sunderland all have smaller amounts of gross atypical capital expenditure adjusted for the calculated grant increase. In contrast, Leicestershire's amount was larger, but no adjustment was made. Will he revisit that case and write to me?

Phil Woolas: I looked specifically at the point my hon. Friend raises. There are different routes and frameworks for capital financing and I think that he has tabled questions on that subject, but I will give him further details. The differences between local authorities make the different routes for capital financing difficult to explain in lay language. My hon. Friend indicates that it would be helpful if I wrote to him about the details, and I undertake to do so.
	During the consultation period, the Department received 169 written responses from 136 individual authorities, Members, and groups of authorities, and I met delegations from groups representative of the different types of authority. The most frequently raised issue was the way in which grant changes are damped from year to yeara point that has also been raised today. A number of authorities opposed in particular the way in which the new formulae for social services for children and younger adults are being phased in at the same time as the overall grant settlement is subject to the floor, which is another point that has been raised in the debate. However, given that the new formulae produce considerable swings between authorities, I took the decision last year to phase in the new formula for at least two years, and I have not been persuaded that I should reopen that decision for the second year of the two-year settlement. However, we will look at the issue again for the next three-year settlement, from 2008-11.
	A number of responses raised concerns about the population figures that we use in the settlement. As in other areas, we use the best data consistently available across all local authorities, and for population that means the estimates and projections produced by the Office for National Statistics. As Members know, the ONS is engaged in a programme of work to improve progressively the methodology used in calculating statistics for population and, in particular, for migration. Ahead of the next three-year settlement, the ONS anticipates incorporating in population estimates and projections improvements in data on the geographical location of international migrants. Beyond that time, work will continue, but it is clear that there are no quick fixes and change will be gradual.
	A number of authorities and groups asked us to increase the amount of grant available by 1 billion, on the grounds that the yield from business rates had increased since last year. That sounds an agreeable prospect, but unfortunately it ignores how public finances are managed and planned. The Government provide for an aggregate of funding to be distributed to local government for the three years of the spending plans. That aggregate includes business, or non-domestic, rates and revenue support grant. If the business rates yield decreases, the Government bear the risk and increase the RSG accordingly, but it is not a one-way street; if the business rates yield increases, the Government cannot conjure up another billion pounds from thin air.
	I considered all the points that bear on the amount and distribution of grant in 2007-08 in the light of the policy on three-year settlements and found no circumstances sufficiently exceptional to cause a change in the plans first announced last January, so I confirm my proposals on grant distribution, including the grant floor levels. Those floorsthe minimum percentage grant increase, on a like-for-like basisare 2.7 per cent. for all authorities, except police authorities, where the floor is 3.6 per cent., which the House debated earlier. For the future, before we decide on proposals for grant allocation from 2008-09, there will be further opportunities for authorities and groups of authorities to make proposals if they want to do so, and there will be a further round of consultation.
	Another fair and predictable grant settlement means that there should not be any excuse for large council tax rises. I certainly do not think that the scare stories that are dreamed up sometimes by Opposition Members qualify as factors that councils should take into account in setting their budgets. I am pleased that the Local Government Association predicts that there will be council tax increases below inflation this year. I can confirm to the House that the Government remain prepared to use their capping powers to protect council tax payers from excessive council tax increases in 2007-08. That message applies to all authorities, including fire and police authorities.

Paul Beresford: I have a quirky question. The cap is normally assumed to be a percentage. If the percentage rise for a council with an expensive council taxI am not going to mention any, but we have a fewwas 2.5 per cent., that would be a considerable increase on the doorstep. But if the percentage rise in the Minister's favourite council, Wandsworth, was 5 per cent., in money terms that increase could be distinctly lower than in the more expensive council with half the percentage increase. So why is it always said that there is a percentage level set? That appears to be the impression that the Minister and his predecessors have given in the past.

Phil Woolas: The hon. Gentleman is eloquently trying to tempt me down a route that I do not wish to go down, although he does remind of Rodney Bickerstaffe, who put the same point rather more bluntly in trade union negotiations. He said that x per cent. of nothing is nothingin more industrial language than I have just used, as the House may imagine. It might help the hon. Gentleman if I laid out the policy towards capping and then answered the specific point that he made in relation to his authority.

Paul Beresford: It is not my authority.

Phil Woolas: I think that the hon. Gentleman carries a spiritual ownership of it through the generations. Certainly, the hon. Members that represent two of the three constituencies in Wandsworth would blame him for what they see as the problemsperhaps the third would not, but let us not go into that.
	No decisions have been taken on capping principles for 2007-08, but no authority should make the assumption that it is somehow immune from the capping policy. As in previous years, we will take action to deal with excessive increases if that proves necessary. The principles of previous years should not be used as a guide for the future. In order to cap, the Secretary of State must decide whether an authority's budget is excessive according to a set of principles. One of the principles must involve a comparison of the authority's budget requirement over one or more years. To be capped, an authority must therefore have set an excessive budget requirement increase and have exceeded any other principles the Government decide to use, for example: a principle relating to council tax increases. That would be the case in all authorities.
	I said that I would answer the hon. Gentleman's specific point. As I have just said, we have not decided on the principles for the future. The point that has been made has also been made by a number of authorities. Of course, one has to protect against the inflationary pressure that council tax increases can bring about. The principles that have been used for this year and in previous years have related to budget requirements and council tax increases. That is an important point that addresses the point that he and Rodney Bickerstaffe make.
	I am pleased to note that the proposed merger of the fire and rescue services in Somerset and Devon will go ahead next year. I can confirm my proposals for the alternative notional amounts for Devon and Somerset fire and rescue authority and Somerset county council. They will enable like-for-like comparisons to be made between 2006-07 and 2007-08 budget requirements for capping purposes and will also prove helpful to those authorities in setting their budgets.
	Local government finance is not normally described in these terms, but I believe that this year's settlement is revolutionary.  [ Laughter. ]

Eric Pickles: Go onI didn't mean to spoil it.

Phil Woolas: I will. This is the first time the Government have made allocations to councils of formula grant for more than one year at a time. It is a step on the way to passing on a full three years of grant following the next comprehensive spending review. Almost as dramatically, the settlement continues the sustained investment in services that has taken place under this Government. We have delivered 10 years of above-inflation grant increases to local councils. The distribution of the grant carefully balances greater fairness with stability, and I commend the settlement to the House.

Eric Pickles: The settlement is revolutionary, in the sense of listening to the late Enver Hoxha announcing the tractor production figures for the great Albanian republic.
	The Minister gave several technical justifications for the settlement, which I am sure that we all enjoyed, but outside the Chamber, the Government seem remarkably content about the projected increase in council tax. Their contentment is almost verging on smugness. The Minister was quoted in  The Times last week as saying:
	It is encouraging to note that ... local authorities are driving down council tax rises.
	No doubt he had in mind the magnificent London borough of Hammersmith and Fulham, which, after decades of Labour mismanagement and waste, has been able, under a new Conservative administration, to cut its council tax by 3 per cent. However, not all authorities have the mixed blessing of inheriting a badly run council. Elsewhere, we are seeing increases.

Edward Davey: rose

Eric Pickles: How nice to see the hon. Gentleman in his customary place.

Edward Davey: The hon. Gentleman mentions Hammersmith and Fulham. Does he realise that because the authority gets a grant per head of 624, it is one of the better-off London boroughs? If Kingston received the grant per head of Hammersmith and Fulham, we would be able to cut our council tax by 80 per cent.

Eric Pickles: The borough was Labour-controlled, but is now Conservative-controlled. It is the change from Labour to Conservative about which I am remarking. No doubt the hon. Gentleman will have plenty of time to make various points about the budgetary blocks.

Andrew Slaughter: I do not wish to detain the hon. Gentleman because I hope to have the opportunity to tell the truth about Hammersmith and Fulham council later

Andrew Pelling: Labour lost.

Andrew Slaughter: That is true.
	I assume that the hon. Gentleman agrees with the cut in the council tax. Does he also agree with the extraordinary cutsschools have been closed and home helps have been sackedacross every single service in the borough, ranging from street cleansing to theatres?

Eric Pickles: I will come on to this in greater detail, but the council essentially has to pick up the tab for the changes in the NHS. The hon. Gentleman has said that it is important for authorities to balance their budgets and I think that he introduced the concept of robbing Peter to pay Paul.
	Council tax will hit the 1,300 mark from April. That is the equivalent to people paying 110 a month out of their pensions or take-home pay. We are well on the way to a band D bill of more than 1,500 in a couple of years. As the  Daily Express said when the settlement was announcedI think that it speaks for the nation on this occasionsince Labour came to power, there has been
	a wicked, cynical and pernicious drain on the resources of all of us and especially those who are least able to cope with the rise.
	As the Minister recently admitted:
	It is not the council tax per se but the increases in council tax which cause concern.
	There has been an increase on top of an increase, on top on an increase, on top of an increase. We have heard the same weary tale for 10 years: increases piled on top of one another. We have seen increases of 59, 51, 48, 55, 74, 126, 65, 47 and 54. There is now an increase this year of 44. There has thus been an increase of 623 for an average home, although that amount is bigger for one of Labour's millionaire donors. Householders may well wonder if they would achieve better value by clubbing together and using their 623 contribution to buy a life peerage. It is a stark measure of council tax rises under the Government that an increase of 3.5 per cent. above inflationthe Chancellor's favourite measurecan produce a monetary amount that a decade ago would have required double-digit percentages to achieve. A 44 increase hits someone's pocket hard, whether it is caused by a 3.5 per cent. increase in council tax or an 11 per cent. increase. It is a big increase if someone is struggling to make ends meet.
	Labour inherited a system of council tax finance that worked. It is incredible that as recently as 1998 the Government should declare:
	The council tax is working well as a local tax. It has been widely accepted and is generally very well understood.
	Within nine short years, the Government have wrecked that tax, as they have wrecked so much else in local government. They continue to proceed with the planning and a computer database for council tax revaluation in England. Nice neighbourhoods, scenic views and home improvements have all been targeted, as homes with such features will be subject to a hike in taxes. The hounds of the Minister's paparazzi-like council tax inspectors have dug even deeper into people's lives. In Wales, the 2005 council tax revaluation resulted in four times as many houses moving up a band as down.
	Northern Ireland has been used as a testing ground for the new price index scheme by the Labour Government, and from April, every home will be charged 0.633 per cent. of the house price every year. In Scotland, a report by the Liberal Democrat and Labour Executive backs a house price index of 1 per cent. a year. Such a tax is being considered by the Lyons inquirywe look forward to the publication of that report in Marchbut if it were introduced in my constituency, a hard-working family living in an average house would have to pay about 2,000 a year. The majority of year-in, year-out council tax increases are the direct result of national pay increases and unfunded burdens imposed by central Government on local authorities. Those arguments are well rehearsed, but I wish to offer the House two new ones.
	The latest addition to the list of Government schemes is the free bus pass for over-60s. Everything would be fine if only a few pensioners took up the offer, as funding for the scheme ignored past demand, and assumed a modest increase. Predictably, that assumption was wrong, and demand increased while central Government funding did not. Lord Bruce-Lockhartthe Minister's favourite Conservative spokesmansaid in  The Times:
	The free bus pass was a good idea but it hasn't been funded so it has become another pressure on the council tax bill, which the elderly cannot afford to pay.

Mark Prisk: Is my hon. Friend aware that East Herts district council has discovered that the cost of that apparently generous scheme is 732,000 this year? Is it not ironic that the very people whom it is meant to help will have to foot the bill?

Eric Pickles: Yes. We often deal with billions of pounds in the Chamber, so that sounds like a relatively small sum of money. For the good folk of the district council, however, it is an enormous part of their budget. Recently, I had the opportunity to meet some of Hertfordshire's splendid councillors, and what is true in that county is true across the country. It is a prime example of a proposal that only works if people do not take it up. If people use their pass to travel by bus, the whole thing starts to collapse.

Andrew Pelling: In Croydon, the cost has increased by 8.3 per cent. to 862,000. Does my hon. Friend not agree that the figures quickly accumulate into millions of pounds and more, and the burden will fall on hard-pressed council tax payers?

Eric Pickles: Yes. The Government had their day, and got all the good press, but the hard fact is that it is not they who will foot the bill, but the hard-pressed council tax payers. Let me give my hon. Friend another example, with regard to licensing. In previous debates, I have raised the worry that licensing authorities would not be fully compensated for the extra costs imposed on them by the Government. Assurances were given in the Chamber that that would not be the case, but we now have the benefit of the Elton report on licence fees, which said:
	When looking at the income received by authorities over the 3 year transitional period, this translates to an excess cost of around 43 million, which we recommend should be funded by central Government.
	So the worries that we expressed proved to be well-founded. I would be grateful if the Minister told us whether the Government will make good on the guarantees given at the Dispatch box.

Neil Turner: My point relates back to the concessionary bus travel scheme, and the elements of it that the hon. Gentleman said had been imposed on local governments by the Government. Is he saying that the Conservative position is not to fund those schemesin other words, to scrap them altogetheror is it to put more money into them, so that the council tax payer does not pay for them? If it is the latter, is he giving a commitment that a future Conservative Government would fund local government more heavily than this Government do?

Eric Pickles: The hon. Gentleman is trying to pin me into a corner, but if he wants to succeed in doing that, he will have to be a lot more subtle about it. If he is advocating putting schemes together and not paying for them, well, that is the system that exists now. We are clear that, if we were in governmentand we soon will be a Government, sitting across the Chamber on the Government Bencheswhen we decided to impose a scheme on local government, we would be mindful that there should be no transfer of costs on to the council tax. We would ensure that, if we passed on a burden, it would be funded, and transparently so.

Phil Woolas: rose

Eric Pickles: If the Minister is about to announce that the 43 million mentioned by Elton will go back into local authority coffers, I will gladly give way to him.

Phil Woolas: Will the hon. Gentleman confirm the policy announced by his party leader at the Local Government Association conference last summer, which is that under a Conservative Government, there would be no ring-fencing of grants to local government? If that is the policy, how can the hon. Gentleman possibly give the commitment that he has just made?

Eric Pickles: The way in which local authorities deal with money, once it is handed over, will be a matter for them, but they currently have the worst of both worlds. They have been passed burdens, but no money. We propose to pass the money on to them, if we agree a burden, and we propose that they decide whether they could do things cheaper or better. The problem with the Minister is that he wants to control everything but, frankly, can manage nothing.

Graham Stuart: My hon. Friend may have just made my point. Labour Members are so used to a system in which everything is decided from the centre that they cannot release themselves mentally even to imagine what it might be like to allow local accountability, and for the House not to have Ministers making promises that they then do not provide the funding for, leading to greater stealth taxes, which have undermined the Chancellor's reputation perhaps more than anything else.

Eric Pickles: My hon. Friend makes his point with his customary elegance, and I do not seek to enhance his comment in any way, because he made it extremely well. On the request to guarantee the 43 million, we notice that the Minister has not rushed to the Dispatch Box to announce that he will sign the cheque.
	The importance of other settlements pales when compared with the importance to local government of next year's summer spending review, which we touched on earlier. The Local Government Association produced a constructive document outlining the funding crisis facing local government, and it includes the No. 1 problem facing local government, namely the care of the elderly. I have a prejudice on the subject because of my experience as chairman of a social services department. Like many hon. Members present, I have seen at first hand the effects of a local shortage of dementia beds.
	The number of people aged 85 and over has been increasing rapidly in recent years by almost 6 per cent. a year, with a growth in dependency and in the complexity of cases. A quarter of over-85s develop dementia, and a third of those need constant care and supervision. Some hon. Members on the Labour Benches seem to find that amusing. If a relative of theirs ever suffers from dementia and they see the deterioration, they may find it in their hearts to be a little more compassionate.
	Further demand is generated as the NHS withdraws from service agreements, as the hon. Member for Richmond Park (Susan Kramer) noted. Nearly half of all councils have experienced a reduction in primary care trust funding for joint projects. To manage rising demands and costs, local authorities have increasingly raised the eligibility criteria. That is the most dramatic change that I have seen since I first became involved with the problem over 30 years ago. We have moved to a world where only those elderly people who are unable to perform most or all personal care or domestic routines receive support. Not surprisingly, the growing number of older people with increasingly complex needs is placing local authorities under pressure.
	Local authorities have more than doubled their spending on care for older people in the past 10 years, yet Government funding for social care has not kept pace. The Local Government Association estimates that Government funding has increased by just 14 per cent. in real terms since 1997-98. Of course, if the same group of people qualify for nursing care, there has been a 90 per cent. increase in funding for the NHS. The figure demonstrates that social care is the Cinderella service of the Department of Health, as the Under-Secretary of State for Health so rightly said last year.

Andrew Slaughter: The hon. Gentleman makes a powerful case for social care. If, therefore, a council had cut 1.5 million by tightening the criteria, sacked all 166 of its home helps, had no assessment staff and had put up the cost of meals on wheels by 25 per cent. in order to cut council tax by 3 per cent.50p a weekwould he condemn it? That is what Hammersmith and Fulham council is doing.

Eric Pickles: The hon. Gentleman makes his local point, but it does not diminish my argument that care of the elderly is in deep crisis because changes have occurred in funding and in the elderly population. When I became involved in social services many years ago, the kind of people in elderly persons homes were very different in character. We have moved further away from that. I believe the conventional elderly persons residential home will gradually disappear, to be replaced principally by dementia beds and more severe dementia beds.
	The hon. Gentleman makes a political point, but we should be trying to achieve some degree of consensus because the problem is the most challenging that the Government and the Opposition face. With good will, I believe we could move towards consensus.

Mike Hancock: Will the hon. Gentleman give way?

Eric Pickles: The hon. Gentleman is noted for his tone of consensus.

Mike Hancock: I am grateful to the hon. Gentleman, and I apologise for not being present at the beginning of the debate, as I was chairing a Committee. Does he share my view that the long-term care of dementia patients should not be part of the responsibility of local government? What is the Conservative view on that?

Eric Pickles: I am not sure the hon. Gentleman is right. There are clearly some differences, particularly in respect of intermediate beds, where people spend some time in order to be assessed. The cost, which would normally be paid by social services, is paid by the state. I accept that there are problems with regard to the definition, which we need to consider seriously. However, we could make significant changes if we were more aggressive on joint commissioning, revisited the regulations on the joint registration of homes as between nursing care and social care, dealt with the training of people working in homes, and tried to find different ways of ensuring that when a care package is put together both sides can stick to it. There are lots of practical things that we could do to make a difference.
	The hon. Member for Richmond Park talked about her local council, Kingston. I should like to give three examples of what the pull-out of funds from local authorities has meant in practice. Devon county council reports facing a 15 million budget shortfall in 2006. By 2026, there will have been a 73 per cent. increase in those aged over 85, with the cost of caring for somebody of 85-plus being twice the average cost of caring for someone aged 75 to 85. That is placing significant pressure on its budget. The London borough of Harrow has been forced to make a 9 million cut to avoid a financial crisis as a result of increased demand for social care and cost-shifting by the local primary care trust. Wiltshire county council has been forced to introduce a 7 million recovery plan to overcome a deficit in its adult and community services department following reductions in NHS funding.
	Care for the elderly is challenging not only financially but emotionally. At times, it can be heart-breaking. Its effects permeate society far beyond the immediate family. The crisis in elderly social care has long been predicted, and its arrival is not in dispute. Any civilised spending review must put it at its very heart the care of the elderly.

Madam Deputy Speaker: Order. I remind all right hon. and hon. Members that Mr. Speaker has imposed a time limit of 10 minutes on all Back-Bench contributions.

Eric Illsley: In keeping my remarks very brief, I make the same complaint as I made last year. In a three-and-a-half hour debate, the Front Benchers have taken up just over an hour. The wind-ups will probably take another 20 minutes, so almost half the debate has gone in Front-Bench contributions. I keep banging on about that every year, because it demeans our debates. We could do with a much longer period to debate local government finance, which is an important subject.
	My first point concerns the second year of damping in relation to social services. The Minister has already said that he is not willing to change his mind on that, but I make no apology for raising it with him again. The SIGOMA group has had several meetings throughout the year with himI am grateful to him for attending themand with his colleagues to try to make the point that this represents a substantial amount of money. Year after year, it seems that we cannot get these formulas right. The damping mechanisms or the ceilings and floors mean that some authorities gain and some lose out, while those that really need the money are deprived of it for three or four years until the mechanisms correct the anomalies. I have been in the House for almost 20 years, and every year we have seen some form of adjustment mechanism for the grant.
	The figure of 238 million was mentioned in relation to the SIGOMA group. For an authority such as mine, that would equate to about 10 milliona substantial amount of money that would perhaps enable us to adjust our council tax, if not in the same way as Hammersmith. My hon. Friend the Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) will no doubt return to the cuts in services in Hammersmith that he mentioned earlier. People in Barnsley are looking at what is happening in Hammersmith, where they see the reduction in council tax and begin to wonder whether we are again in a situation whereby the money is flowing south.
	As has been pointed out, the revenue grant savings made because of the business grant this yearthe 1 billion figurecould have been funded equally easily by removing the damping to the tune of 238 million and giving the money to the local authorities that need it.
	We are not talking about profligate authorities here. Barnsley is a well run authority, as most metropolitan authorities and, indeed, most authorities in the country are. It is always looking to improve its performance. For example, on Monday this week, Barnsley council hosted a seminar for local authorities from all over the country. At that seminarthis is wizard for a former coal-mining authorityit passed a declaration that in future any council-owned premises in the authority will be heated by wood burning. We have been wood burning now for some time and we have won awards for it. Apparently, we have already metin fact, we have surpassedour 2060 targets for environmental cleanliness. The money that Barnsley has saved, thanks to some innovative ideas, has been quite substantial over the past 10 or 12 years. That is why I say that these are forward-thinking authorities, doing their best to save money and provide good services.
	The knock-on effect has already been mentioned by the hon. Member for Brentwood and Ongar (Mr. Pickles) when he spoke about care issues. We have joint partnerships with our primary care trusts in Barnsley. Until the recent reconfiguration we had the biggest PCT in the country, though I am not sure that that is still the case. The Minister mentioned that local authorities and PCTs should be striving to balance their books. My PCT would have balanced its books for this financial year end, but it had to pay a 7 million levy to fund authorities in deficitnamely, Sheffield, which had substantial deficits. Thus 7 million has gone out of the PCT and the partnership funding. If the local authority is at the same time being squeezed on funding that should be made available, especially for social services, we face something of a double whammy in that the money is being squeezed at both ends of the partnership. I repeat the point that Barnsley PCT is still not funded at its target. I think that we are now at 97.5 per cent. and we are being funded less and less in relation to the target every year. Those are the two main points.
	I have already alluded to the case of Hammersmith. I will say no more, as I hope that my hon. Friend the Member for Ealing, Acton and Shepherd's Bush will make his points, but it is worth mentioning the continual argument between authorities in the north and authorities in London. Quite a number of London authorities have the same needs and assessments as authorities in the north. The requirements are similar, so there is no easy argument about money going into London, depriving the north. We should stop making statements about money that London needs going to northern authoritiesor vice versa. That is not the case; it is obvious that there are needs on both sides. I have not always taken that much notice of the issue, but if London authorities can afford to stage the 2012 Olympics, they cannot be doing too badly.

Rob Marris: No, you are going to pay.

Eric Illsley: I can give a commitment now: we are definitely not going to pay for that, which is well off the agenda. As I said, London authorities had the money to pay for the Olympic games bid, so they cannot be doing too badly.
	One issue that affects my area is the building schools for the future programme. We are looking at a huge programme of school rebuilding in my constituency. Every secondary school will be demolished and a number of them will be rebuilt. Every school place at secondary level will be

Rob Marris: It is being done with wood.

Eric Illsley: All fuelled by wood! It is a substantial programme and a huge commitment for the local authority. Given recent pressure on available funding, I would like the Minister to confirm that the programme will still go ahead.

Graham Stuart: I share the hon. Gentleman's frustration that Sheffield, which is already given more money than its needs assessment dictates, overspends, resulting in 8 million being top sliced from the budget for the East Riding of Yorkshire. He contrasted the north with London. Does he also accept a comparison between urban and rural areas? I am delighted that schools will be rebuilt in his constituency, but my area, which bears major costs in sparsely populated parts of the countryside, is not getting the investment in education that it needs. Does he support a better balance between the countryside and urban areas?

Eric Illsley: I take the hon. Gentleman's comments on board. He and I lobbied the Yorkshire and the Humber strategic health authority on such issues. I hope that he will have the opportunity later to make those points in detail.
	I hope that the Minister can reassure us about the building schools for the future initiative.
	The equal pay single status issue has been raised with the Minister on several occasions. Again, it will create huge costs for local authorities the length and breadth of the country. I hope that he will deal with that when he sums up.
	I hope that the Minister will also make a commitment to retaining the neighbourhood renewal fund because it has an impact on the other services block. It is important for a metropolitan borough such as mine, where the majority of the funding is spent on education and social services but, in survey after survey, the majority of the people ask why they cannot have clean streets and better services, recycling and so on.
	I should like to lobby the Minister on the local authority business growth initiative. My local authority will not qualify for funding from that until perhaps year three. If he removes the damping measures in year two of the initiative, will he do the same in year three, thus ensuring that the funding is still available for local authorities such as mine, which qualify at a later date simply because our rateable income from business properties has not been substantial in the first two years?

Tom Brake: Just as my hon. Friend the Member for Cheadle (Mark Hunter), who opened the earlier debate for the Liberal Democrats, thanked the police for their hard work and commitment, I shall do the same for those who work in local governmentnot only because my wife works there. They are more likely to receive brickbats than plaudits, and we should acknowledge that they provide vital services, which make a genuine difference to our quality of life and local environment. Local government has responded year after year to requests for efficiency savings. Indeed, it does that much more effectively than central Government.
	Unique circumstances prevail this year. The Government's White Paper, Strong and Prosperous Communities was published, the Local Government and Public Involvement in Health Bill and the Greater London Authority Bill are being considered, and we expect the report of Sir Michael Lyons. Indeed, we have a Government who, on the face of it, are willing to give local authorities greater responsibility in place-shaping an area.
	There was therefore an opportunity for this year's local government finance debate to jettison the bombastic references to billions of pounds of Government expenditure, above-inflation increases, the most generous settlement ever and so on in favour of a discussion that confirmed that the Government had loosened the purse strings and been willing to trust local authorities with their own finances. I regret that that opportunity has not been grasped.
	The Government have adopted the same old tired approachI was about to say, of spraying the chamber with facts and figures, but that would be uncharitable to the Minister. He has deployed them carefully, with the deviousness of a chess grandmaster, rather than splattering them around the Chamber, disregarding all requests for changes to the formula and using headline figures that mask the reality of what is happening on the ground.
	I should like to set out some issues that have not been tackled in the debate. The comprehensive spending review affords the Government an opportunity to make good. Let us consider wage settlements in local authorities. Perhaps the Minister can confirm in his response to the debate that the increase in local authority wages is expected to be 2.5 to 2.7 per cent. What does that mean for local authorities receiving less than that in real terms? Hon. Members, including my hon. Friends, have mentioned local authorities who will be in that situation.
	What of the extra autonomy to be granted to local authorities promised by the White Paper, Strong and Prosperous Communities? Can the Minister confirm whether ring-fencing has been reduced? Of course, he cannot; instead, he will have to confirm that ring-fencing of council budgets is at record levels, and that local government is still being treated as a delivery arm of central Government rather than a tier of government in its own right. For all their talk of autonomy and greater devolution, the Government are again threatening councils with capping. Where does that leave councils that have a historically low level of taxation? What logic is there in requiring councils to re-bill if they have set a budget over the cap, when the re-billing costs are more than the saving in council tax? The Minister said that he had not yet established the exact principles in relation to capping. I hope that he will at least establish the principle that a requirement to re-bill in such circumstances would not be terribly sensible.
	How does the Government's claim of a 4.9 per cent. increase for English authorities bear up to scrutiny? The Minister's statement shows that once specific ring-fenced grants are taken into account, the increase in total formula grant is 3.7 per cent. Some councils will receive the minimum increasemy council and many others will receive 2.7 per cent.but the adjusted grant for my local authority and others pushes the increase below that level. For instance, Sutton will receive 1.7 per cent. at a time when, as other Members have mentioned, the retail prices index is running at 4.4 per cent. and inflation in local government might be higher still.  [Interruption.] The Minister expresses desperation about my remarks from a sedentary position, but I hope that he will explain why he does not agree with that point, which is made by many local authorities.
	I do not want to be too biased in my presentation of the facts, so I will welcome the significant above-inflation increase in education spending. The Minister will know, however, that because education spending is ring-fenced, councils have no flexibility, and if savings are required, those end up being made principally in adult social services. As several Members have mentioned, according to representations made by the special interest group of municipal authorities outside London within the Local Government Associationthat explains why it is abbreviated to SIGOMAthe Government's failure to apply changes to the social services formula means that most metropolitan and large urban authorities will be deprived of about 250 million, putting them under great pressure. In opening the debate, the Minister talked about Members arguing over the minutiae of the formula. I hope that he was not referring to that 250 million, as it is a substantial sum.

Neil Turner: As chairman of the SIGOMA group, I am delighted to hear the hon. Gentleman supporting our claim for that 250 million. Does he realise that granting us that would ensure that his authority received less money? Is he happy with that?

Tom Brake: I am sure that the hon. Gentleman would not expect me to welcome the fact that his proposals would slash funding for my local authority. What is needed is a fair, transparent, open system, which allows local authorities to set the level of tax that they think is appropriate, and to pay the consequences at the ballot box, if necessary, at the next election.
	Social services are therefore left reeling from a double whammy. One could argue that it is a triple whammy, as they are also hit by fees in nursing, residential care and home care all increasing by more than 4 per cent. No doubt the Minister will say that local authorities should beat down prices in those homes. But how realistic is that? I suspect that every Member present in the Chamber will have been lobbied recently by care homes in their constituencies stating that they cannot make ends meet with the rates that are currently paid to them; in fact, private individuals are having to make up the difference in many cases. I do not think that it is realistic to ask local authorities to play hardball with care homes, many of which are on the verge of closingif they have not already done sobecause of the amount that they must pay to stay open.
	In its briefing, the Local Government Association identified many other problems that the report does not address. I do not have time to refer to them all in detail, but waste collection and disposal costs are rising at a rate of 9 per cent. per annum. The Minister would have some justification in saying that local authorities should have planned for that, given their awareness of an inbuilt increase in landfill tax. That is true, but authorities have also been hit by a substantial increase in transport costs, which are a key part of the costs of waste collection and disposal.
	There is the issue of children with severe and complex needs. Thanks to medical advances many are now surviving and leading longer and fuller lives, but the cost of an individual care package often runs into six figures. A limited number of such children can have a significant impact on a local authority budget. Other Members have mentioned concessionary fares, so I shall merely say that local authorities' grant clearly does not cover the full cost and that the Government must deal with that.
	Some authorities have experienced a sharp rise in the number of short-term migrants, those resident in a local authority area for less than 12 months. In some areas, there are hundreds or even thousands of such migrants. Admittedly many are young people who may not make substantial calls on council services, but no account has been taken of those who will.
	Perhaps the most important issue is cost-shunting. There is evidence from all over the country of attempts to shift financial pressures from primary care trusts and acute trusts to local authorities. That is being done either directly or indirectly: for instance, PCTs may cut funds for voluntary associations which then expect local authorities to make up the difference. Open Door is a service that provides counselling for teenagers who are not yet ill enough to need access to acute mental health services, and may not need it if they receive counselling. A PCT has cut funding for that service without, apparently, trying to fill the gap with an alternative service. I am hopeful that it will do a U-turn, but we must wait and see.
	There are many other examples, but I shall give just a few. There is no great significance in the authorities that I selected from the pile: they were in alphabetical order, and I took the top ones.
	I am told that Durham county council is finding it
	difficult... to secure additional funding for shared cost packages especially in relation to Learning Disabilities clients.
	Even if there is no cost-shunting, the council can see that pressures in the primary care trusts and acute trusts will stop it from expanding services. Dudley metropolitan borough council tells me that
	planned improvements/developments have been deferred; there are particular risks around continuing care.
	Haringey council says
	The PCT withdrew 0.4 million... for some services that were previously jointly funded.
	The costs were staff-related, but who had to pick them up? The local authority. Allerdale borough council says
	There is only a limited relationship between the Council and the PCT,
	and that the council is finding it difficult to involve the PCT in regeneration programmes.
	All that shows that cost-shunting and the shortfalls that PCTs are having to address are already having significant effects on their funding for voluntary associations, on services and on partnership arrangements with local authorities. It is clear that that will get worse in the short term; it will not get better. I hope that when the Minister responds he will say how that has been taken into account in the settlement.
	There is no room for complacency. A 14 per cent. increase in real terms since 1997 is not a cause for celebration, although I acknowledge that it is better than the poke in the eye that local government received from the official Opposition when they were the Government and were responsible for funding local councils. Local authorities face many of the same battles now as they did 10 years ago. The words with which my hon. Friend the Member for Brent, East (Sarah Teather) concluded the debate on local government finance a little more than a year ago are as pertinent now as they were then:
	We need a new system of local government finance that is based on fair local taxes, localised business rates, local income tax and a simple grant mechanism, without ring-fencing, passporting or capping.[ Official Report, 6 February 2006; Vol. 442, c. 687.]
	That is what we should have been debating today. Instead the Minister has deployedin a reasonable way, I accepta barrage of statistics that has served only to obscure the important issues involved in this debate. The Minister promised clarity and transparency; instead he has provided smoke and mirrors, and the debate has been the poorer for that.

Andrew Slaughter: I have heard what has been said about the settlement. Some problems might, indeed, be prevented. I do not wish to make light of those problems, but I had 15 years of setting budgets for a local authority, which is a difficult process, and I would rather have had this settlement than any of those I had between 1990 and 1997. It has the advantages of giving an above-inflation increase in funding from central Government and of being the second year of a two-year settlement, which gives stabilityand we are moving towards a three-year settlement. It also has the advantage that all responsible local authorities are now building Gershon, or Gershon-style, efficiencies into what they do and achieving real savings without cutting front-line services. Generally speaking, local government finance is in a much better state after 10 years of a Labour Government than it was previously.

Graham Stuart: Does the hon. Gentleman agree that during the 1990s under the previous Conservative Government council tax rises were at or near the level of inflation, whereas council taxes have doubled under Labour?

Andrew Slaughter: I shall talk about my local issues, but I agree that council tax rises should be kept to moderate levels, and they generally wereI had below-inflation increases and my authority moved down the scale. A balance must be struck between services and council tax increases, because council tax is a regressive tax.
	The Local Government Association has acknowledged that this is not a bad settlement; by reading the language, one can learn how good or bad it thinks it is. I say that by way of introduction because it makes what is happening locally in west London all the more remarkable.
	I should say for the avoidance of doubt that there are two local authorities in the area I represent, both of which are Conservative-controlled. I want briefly to mention the London borough of Ealing. Its council is having a council tax increase of 1.9 per cent., which I think is slightly too high, and it is also having some cuts in front-line services including in adult social services, which I think are unnecessary and inappropriate, but it is largely following the previous Labour council's financial plansI do not know whether that is because they were very good plans or because the Conservatives did not expect to get elected last May and have not quite got their act together yet. However, I must be honest and say that although there might be some problems, there are not many.
	However, I now turn to the situation in Hammersmith and Fulhamand, oh dear, what do we see? What we see is a pledge to give a rebate of 50p a week on averagethe sum will, of course, be less for people who are poor or who live in a small property, and more for those in a higher band property. I have no objection to people being given 50p a week, but in the brief time that I have I shall explain what that rebate will mean.

Greg Hands: Will the hon. Gentleman give way?

Andrew Slaughter: I will do so in due courseit always helps my argument when I give way to the hon. Gentleman.
	The local budget in Hammersmith and Fulham is, I fear, the work of amateurs, and I obviously take some exception to that, having crafted it so carefully over many years. The council has raided the ample balances left by the previous Labour council, which would account for 2 per cent. of its 3 per cent. rise in any event. It has received a 3.4 per cent.3.6 millionincrease from central Government, which is equivalent to 6 per cent. on the council tax. It also had the benefit of a very good medium-term financial strategy, delivering above-Gershon savings every year. It has introduced two items of growth. First, it changed its corporate identity, so that everything in the borough is now painted bluebe it notepaper, buildings, signage or notice boards. A huge amount of public money is being spent on branding everything blue.

Mike Hancock: Instead of what?

Andrew Slaughter: I think it was red before, but that was for purely historical reasonsunder Labour and Conservative councils.
	Secondly, the council produced fantastic propaganda sheets, which it put out, at the council tax payer's expense, once a month. It produced three editions of a newspaper, saying what a wonderful job it was doing on every single issue. What one will not read in that paperfortunately, we have an independent press, as wellis what I read every week in, for example, the  Fulham and Hammersmith Chronicle and the  Hammersmith and Shepherd's Bush Gazette. The former ran the following headline: Libraries living on borrowed time. Jobs set to go as council reveals proposals to slash 450,000 from service. The latter ran the following headline: Campaigners against council's plan to close Tamworth Centre, which is a mental health centre in Fulham. Another headline in the  Fulham and Hammersmith Chronicle ran as follows: PM backs campaign. Blair speaks out in favour of school's fight against controversial closure.

Mike Hancock: Will the hon. Gentleman give way?

Andrew Slaughter: I would love to, but I really do not have the time.
	I must admire the council for one thing: it really gets down to the details. According to last week's  Fulham and Hammersmith Chronicle,
	Hammersmith and Fulham Council hires out a variety of items for community occasions but bosses say ... increases ... will start in April ... To dress up as Father Christmas in Hammersmith and Fulham will soon cost you 15nearly twice as much as the original price of 7.95.
	Raffle drums will cost twice as much, up to 10.
	If you want a game of five-a-side football, the inflatable goal hire price will rise from 13.80 to 20.
	This is comic stuff, but it has a serious side.

Greg Hands: I thank the hon. Gentleman for giving way. He did not notify me that he would be talking about Hammersmith and Fulham council, but to be honest, I rather expected it. If he so objects to the council tax cut, can he explain why the Labour group put out a press release, which was then withdrawn, saying that it would have cut the council tax by even more if it was still in office? Most local people found that incredible, after 10 years of Labour council tax hikes.

Andrew Slaughter: The hon. Gentleman must not trespass too much on my time. The point, which I made clearly at the outset, is that it is perfectly possible to have a budget that cuts the council tax without these horrific cuts in services.
	I turn to the serious point that I want to make in the limited time that I have left. Hammersmith and Fulham is pledged to cutting 34 million from a budget of 180 million. Anyone who knows anything about local government finance knows that that must mean very deep, almost unimaginable cuts in services. I referred earlier to the cuts in social services. We are talking about every home help being sacked; no assessment staff; cutting 1.5 million by tightening the criteria applying to the old and the vulnerable; 150,000 being cut from occupational therapy; and 500,000 being saved by closing mental health day care facilities. There are also the cuts in the general services that we all thought the Conservatives were going to support. Some 1 million will be cut from the refuse services and street cleaning budget. Under Labour, Hammersmith and Fulham was the fourth cleanest borough in London. What will it be after four years of 1 million-worth of cuts from the Conservatives?
	The Irish centre, in Hammersmith Broadway, which has a national and not just a London-wide, reputation, has had its budget cut. The Lyric theatre, which also has a national reputation, is having its budget cut. The borough's play and youth services will not exist, given that 320,000 is being cut from those services. Some 400,000 is also being cut from the library service. These are extraordinary, almost unimaginable cuts.
	One might think that education was free from these cuts, given the hypothecation of the budgetbut no. Three schools are to close, not on educational grounds but simply so that the sites can be sold off in order that debt charges can be repaid and further cuts made in the council's budget.
	The affordable housing programme has been completely turned on its head. The minimum of rented housing will be built in the borough. Services for the homeless have been cut to the bone. Even the budget that is set aside for storing the possessions of homeless families, so that they can reclaim them when they are rehoused, has been cut. The number of staff who service the homeless at council offices has also been cut. The message is clear: if people are old, poor or vulnerable, the council will no longer provide services for them. In return, it will give people 50p a week.

Mike Hancock: The hon. Gentleman's story is unfortunately all too frequently the case when Conservatives come into power. Can he explain whether they said anything about such cuts in the run-up to the election, other than that they would save 30 million-odd from the budget?

Andrew Slaughter: They did not even say that. They said that they would cut the council tax, and they have done so, by 50p a week [ Interruption. ] I hear the cheers, but they were somewhat more muted than they have been when the issue has been raised previously, because what is going on in Hammersmith and Fulham is not comparable with what is happening even in other Conservative authorities. It has been described as Porterite and as matching the antics of Wandsworth and Westminster councils in the 1980s, when a studious attempt was made to remove council accommodation from the borough, but things have gone even further and we are seeing almost a type of social cleansing. The council is saying that it does not want community schools in the borough: one is being closed and the other threatened by having an academy opened next door. It is saying that it does not want affordable housing in the borough or social service provisionalthough we heard from the hon. Member for Brentwood and Ongar (Mr. Pickles) that that is a priority for his party. All those cuts will have an impact on the weakest, poorest and most vulnerable people. That is being done deliberately and cynically.
	Nor does the council want the people who serve the community. Hundreds of peoplemostly local and on low incomesare being made redundant in privatisations and service cuts. The message is clear from the Conservative administration in Hammersmith and Fulham: If you are old, poor, in need or homeless, we do not want you in the borough. We want to model ourselves on the central London boroughs which have adopted these policies for many years. It is a cynical and deplorable move, and I believe that when people have another opportunity at the ballot box to consider whether they want 50p a week or decent servicesas provided for many years by a Labour counciland the opportunity to live in a mixed community that welcomes everyone, they will not vote Conservative in Hammersmith and Fulham again.

George Young: It is a pleasure to follow my successor but one as Member of Parliament for Ealing and Acton. I recognise the expertise of the hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) in local government finance and I understand his anger. When he was first elected, the London boroughs of Ealing and of Hammersmith and Fulham were both controlled by the Labour party. After six months of my party being led by my right hon. Friend the Member for Witney (Mr. Cameron), the hon. Gentleman finds that both those local authorities have had a change of control to the Conservatives. As I understand it, the Conservatives locally stood on a manifesto of reducing the council tax. They won, and they are honouring the commitment that they made.
	I listened in respectful silence to the Minister as he introduced the debate and described a revenue support grant settlement that seemed more and more remote from the one that I was looking at in Hampshire. I realised that he had lost contact with reality when, in his peroration, he described the settlement as revolutionary and then sat down. It is possible to seek to defend the settlement in the terms that he did, if one looks at it as a snapshot. If, on the other hand, one views it as a movie, as my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) did, and in perspective, it is much more difficult to defend it.
	From the point of view of Hampshire, we are in the 2.7 per cent. club, which has several members. As the hon. Member for Carshalton and Wallington (Tom Brake) said, 2.7 per cent. does not begin to cover inflation, let alone the rising costs of, for example, adult social care, about which I shall say more in a moment. That low increase in the formula grant is even more difficult, as it follows a settlement for the current year that amounts to 0.2 per cent. once the one-off grants have been stripped out.
	In addition, Hampshire county council's grant for supporting people has been frozen at just below the level for the current year, so it finds itself between a rock and a hard place: if it puts up the council tax by more than 5 per cent., it gets capped; if it continues to make efficiency savingsas it willthere will still be a gap of 10 million, which the council will have to fill by making some very unpalatable decisions. It is unsustainable for the Government to continue to provide grants such as this one while still expecting rises of below 5 per cent. in council tax, with no effect on services.
	The Minister accused Opposition Members of waving shrouds, but I refer him to the report from the Commission for Social Care Inspection that was published in December. It deals with the very difficult decisions that social services departments already have to make. The report was very balanced: it paid tribute to the Government for some of the things that they have done, but it also identified real cause for concern in a number of areas. It found that a third of care homes did not meet the required standards for the management of medication or operate safe working practices, and that a substantial number of home care services are failing standards on the recruitment and supervision of staff. It mentions the juggling that local authorities are having to undertake, and the fact that they are having to tighten eligibility criteria. It also notes that there are question marks about the advice and support available to clients and carers excluded from funded care.
	The CSCI report highlights five groups of people who give rise for concern: those not using council services but in need of information and support; the carers, relatives and friends who carry the cost of ever tightening eligibility criteria; those who lack choice in respect of services or the people who deliver home care; those whose service standards are unacceptably low, and those with special complex needs that are not being met. All the evidence is that the problems are going to get worse.
	Ministers respond by saying that there has been a 39 per cent. real increase in funding for local authorities nationally since 1997-98, but expenditure by local authorities has had to rise by 50 per cent. in that period, in direct response to Government spending plans and to service pressures. As a result, the increase is not as generous as we are told.
	The Local Government Association says that funding from the Government for services other than schools and specific grant priorities has increased by only 14 per cent. in real terms. That contrasts with the 90 per cent. increase given to the NHS. I welcome increased investment in the public services, but one has to compare the very generous treatment given to a service for which the Government have direct responsibility, with the rather miserly funding of services for which local authorities have responsibility. That is especially important in respect of where the two services overlap, which is in social services.
	My second point has to do with damping, the mechanism introduced by the Government to prevent sharp adjustments in grant distribution as we move from where we are to where the Government think we ought to be. Is it a floor, or is it quicksand? In Hampshire, 38 millionor 30 per cent.of our formula grant is at risk as a result of the damping mechanism. The Minister talks about the certainty that multi-year agreements will bring, but that is undermined by the medium-term uncertainty about how the damping mechanism is to unwind.
	I was not greatly reassured by the exchange at the start of the debate between the Minister and the right hon. Member for Birkenhead (Mr. Field). It would be helpful if the Minister, when he winds up, will confirm that the grant floor will be a permanent part of the formula grant allocation, and that the 38 million will not be removed.
	A moment ago, I mentioned residential care. There was a very good debate in Westminster Hall on 17 January on public funding for residential care, about which hon. Members of all parties expressed their concern. It emerged that the pressure on funding means that social services now intervene only when a client reaches a substantial or critical level of need. The Joseph Rowntree Foundation estimates that care homes are underfunded by 1 billion. In the CSCI report, Denise Platt mentioned that primary care trusts and local authorities are increasingly withdrawing from pooled budget arrangements, owing to pressure on funding. Prevention and early intervention are being squeezed out. We need a step change in funding for those services if the quality of care that we all want to see is delivered.
	The Minister might care to read what his colleague, the Under-Secretary of State for Health, the hon. Member for Bury, South (Mr. Lewis), said about his aspirations when he wound up the Westminster Hall debate. The hon. Gentleman said:
	The first point is that older people in this country are entitled to be treated with dignity and respect. They are a generation that worked hard to build this country, and a fundamental sign of a civilised society is the way in which it treats older people.[ Official Report, Westminster Hall, 17 January 2007; Vol. 455, c. 331WH.]
	Can the Minister tell us whether his colleague's ambition will be realised if we continue down the path of underfunding for social services that I have described? The number of people with learning disabilities is increasing by 2 per cent. a year in Hampshire, and as care packages become more sophisticated their cost is ever higher. The funding formula does not recognise that need.
	My final point is about the sustainability of the system by which we pay for local government. The council tax is like an old bridge with a weight restriction. It was designed to carry the pressure of council tax bills of three figures, but not of four, so it is creaking. There is something unsustainable about the regime we are being asked to approve this evening. On each occasion, the Government defer a difficult decision, but the time for drift is coming to an end; it is time that the Government took a grip on local government finance and found a sustainable way of funding it which recognises the responsibilities that fall on local government. I hope that in a year's time we shall have a different debateone with a greater degree of realism.

Neil Turner: I apologise to you, Mr. Deputy Speaker, and to the Minister for not being in the Chamber at the start of the debate. I was elsewhere in the House at a Committee meeting.
	The settlement is broadly good in historical terms. The Local Government Association briefing of 31 January notes that most authorities will receive a higher grant increase than in 2006-07 and that there has been a real-terms grant increase of 14 per cent. between 1997 and 2007-08, although I realise that the Government dispute that figure and say that it is actually nearer 29 per cent., when education is excluded.
	We need to compare the settlement with the years of Conservative Government, when there were cash cuts year on year and the grant was fiddled to ensure that it went to Conservative-controlled local authorities. When the hon. Member for Brentwood and Ongar (Mr. Pickles), the Conservative spokesman, responded to my intervention, it was interesting that he gave no indication whatever that if the Conservatives were in power they would give more money to local government.
	Local government can take no comfort at all from Opposition Front-Bench Members. They complain about the problems, but they offer not a penny piece extra. When the hon. Member for Brentwood and Ongar winds up the debate, I challenge him to give an undertaking to put more money into local government to get rid of the some of the problems he outlined.
	The legacy of Conservative Government remains. Local authorities with measurable needs are not yet receiving the grant agreed under the central Government formula, because the Labour Government have done what the Conservative Government did not do. The right hon. Member for North-West Hampshire (Sir George Young) complained about floors and ceilings, but I do not remember him supporting councils such as Wigan when we were experiencing yearly cash cuts of 10 million, 8 million and 12 million. I do not recall Conservative proposals for a floor on the amount of reduction. The Government have implemented such a floor and I very much support it, because without it local authority finances and services would be destabilised. The floor is an important part of local government.
	If we are to ensure that the Government achieve what they want, which is to tackle deprivation and need, I strongly argue that local authorities have a major part to play. The only way they can do that is if we make sure that they get the amount of money that the formula says that they are entitled to. When the Minister comes to the comprehensive spending review settlement for the next three years and the grant, I urge him to reduce the floor and increase the ceiling so that we can more rapidly move towards local authorities getting the amount of money that they are entitled to.
	My hon. Friend the Member for Barnsley, Central (Mr. Illsley) is not in his place, but he properly raised the issue of the amount of money that has been damped out. The hon. Member for Carshalton and Wallington (Tom Brake) mentioned the amount of money that has been damped out from social services because of the double damping figure. That is extremely important, particularly in SIGOMA areas. The figure is something like 250 million. I was disappointed that the Minister did not feel able to take cognisance of that and make some changes to the grant to recognise the fact that that is the case.
	It is a double whammy for us. Not only are we getting the double damping, but in general, our primary care trusts are underfunded by comparison with the amount of money that the health formula says that we should get. I think that the figure is 8 million to 10 million when it comes to the grant that we have lost in relation to the local authority and 11 million in relation to our primary care trust. That means 20 million has been taken away from Wiganlargely within social services. That extends right across a range of local authorities that I represent in the SIGOMA group. That means that there will be a postcode lottery for social services provision. Some social services departments will be able to provide services for free. Others will charge and others will not provide the services at all. The Minister has to address that issue when he thinks about the grant for the next three years.
	The debate has highlighted one of the difficulties that having a three-year settlement will produce. If we have a three-year settlement and there is something wrong in the figures, local authorities have to deal with that, because it will not be sorted out over the next three years. In a spirit of helpfulness, I put it to the Minister that we should look seriously at perhaps top-slicing part of the grant to local authorities so that there is a pool of money available to central Government. That would mean that, if there were problemsbecause of non-recognition of the indicationit would be available to him to correct the anomaly. If there were no anomalies and local government was reasonably satisfied with the way in which the formula had been sorted out and with the amount of money that it was getting, that pool of money could be put back into local authorities over the following year. The proposal does not involve taking money off local authorities; it involves putting money into a pool that can be used to sort out problems, if there are any, and given back to local authorities if there are not.

Edward Davey: I urge the Minister not to take the advice from the hon. Member for Wigan (Mr. Turner). The Minister and his colleagues have had too many special grants that they have been able to manipulate across the country at will. If they go down the route that the hon. Gentleman has suggested, they will be going back on a promise that they made to the House to reduce a practice that creates great unfairness.

Neil Turner: My point is that the practice would not create unfairness. It would try to tackle unfairness that may get built into the system. We are talking about a hugely complex system. Figures are taken from all over. There are queries about the number of people who live in an area or the number of people who require one service or another service. It is difficult to try to project that kind of thing over a three-year period. I am just saying to the Minister that our experience over two years has shown that there is a 250 million impact on SIGOMA authorities. That is greatly reducing their ability to provide social services. I am suggesting that, if that is the case the first time around, the Minister should look at the possibility of putting a pool of money aside from the grant, so that if that occurs again, it can be tackled and if it does not, the money can be put back and given to local authorities properly. That is a perfectly reasonable solution to a difficult situation.
	I know that many other hon. Members wish to speak. I hope that the Minister will consider my point and think about the impact that double damping has had. In effect, there has been a double whammy because of the PCTs, so it is hugely important that the situation is resolved. I hope that he will not only consider the future following the next round of the comprehensive spending review, but that he will have constructive dialogue with the people in charge of the PCT allocations in the Department of Health to ensure that there is a system of integration in the amount that is given, so that a local authority and PCT serving a community do not find that the amount that they should receive is reduced because of the formula that has been agreed by local and central Government.

Paul Beresford: I congratulate the Minister on his speech. One of his predecessors, whom I will not name, had a tendency to present his case in the form of a triumphant speech. However, the Minister has been a little more constructive, so I hope that he will get a more constructive response.
	I am sorry that the hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) is not in the Chamber. I was going to remind him that he would find that the allegations that he made against Hammersmith and Fulham council were made against Wandsworth council. However, the populace has backed that council and it and the Government have backed the services. The hon. Gentleman should realise that judging the quality of a service by the amount of other people's money that is spent on it is not a good approach.
	I want to touch on two issues, hopefully constructively, although it is worth setting the scene first. The result of the motion will be that most of the south-east county councils and two thirds of the London boroughs will be on what the Minister calls the floor. They will see the floor in the same sort of terms as the Deputy Prime Minister would: as a boxing phrase, not a dancing phrase. The assumed inflation figure of 2.7 per cent. is not the reality for many of those councils for the reasons that we have heard.
	The stark reality for Surrey county council, which is on the floorthe boxing termis that only 15 per cent. of its 640 million budget will be met by grant. Given the inflation costs that it expects to face, rather than the 2.7 per cent. figure, it reckons that it will need a tax rise of 8.6 per cent. Fortunately for council tax payers, if not necessarily service recipients, the council will reduce its budget by about 11 million and, I hope, get the increase below the assumed cap of 5 per cent.
	As we have heard, social services, especially residential homes and care contracts, are the real problem. Throughout the area, we have the problem of cost-shunting and high-volume output to the community from acute hospitals and primary care trusts. Most London and south-east PCTs are in deficit. Every single Surrey PCT was in deficit, and after they were combined into one PCT, all the deficits were generously combined into one very large one. We have been warned that there will be cuts. One of the difficulties is the difference between the way in which the Ministers' Department and the Department of Health examine the needs indices, especially those for the elderly. Some 13 London councils' PCTs are in financial deficit, so they are facing the same problem, and many councils are facing an enormous struggle. Brent council complains that cost-shunting from its PCT will cost it about 9 million, which represents a considerable budget shift.
	Although I have hammered on at Ministers about this over the years, the Government have only just started to learn that they should take away the leverage of central controls, targets and bureaucratic demands on local government. That is essential. One of my little councils, Mole Valley district council, has a tiny budget of about 10 million. However, its last comparative performance assessment cost 250,000, which, due to gearing, added 1 million to the council tax. While the Government are starting to move, tricks can be carried out involving smoke and mirrorsthere could even be a three-card trick. Ministers talk about reducing the number of indicators from between 600 and 1,200 down to 200.
	May I focus on the local area agreement, about which there has been a great deal of talk. The original proposal was for a local scheme with little central control, but I hope that the Minister will look at it, because it has become a monstrosity. There are 180 pages of guidance, and statutory duties and ministerial powers of intervention are to be introduced. There are 60 targets, extensive six-monthly reports on the targets to Government officers and a huge raft of bureaucratic procedures for local partners. The Minister looks a little puzzled, so I will not continue with that list, but the problem does not concern his Department alone. The Department for Education and Skills has more than 150 targets for children; the Department of Health another 100 or so for adults; the Department for Transport has its own set of targets, as does the Department for Environment, Food and Rural Affairs. Having just been hit with a demand for tax because it is the end of the tax year, I am sure that excessive numbers of civil servants are dealing with what is produced with excessive numbers of bureaucrats in local government, especially as local area agreements do not provide any real results on the streets.
	I urge the Minister to consider the points that have been made by Members on both sides of the House about the care of the elderly and the mismatch between the NHS and local government. He may smile at my next request. He and I have both mentioned his favourite local authority. I urge him to take a deep breath and come with me, without officials or anything else, to listen to the people at the front line of what, I believe, is one of the most efficient local authorities to learn what could be done to take the bureaucratic load off local government and still give central Government what they want. It would be good business, and because of gearing it would have a dramatic effect on council tax. Will the Minister accept the challenge?

Mark Prisk: It is a great pleasure to follow my hon. Friend the Member for Mole Valley (Sir Paul Beresford), who touched on one or two points that I wish to make. I shall therefore try to abbreviate my contribution accordingly.
	May I begin by praising the work of many local authorities? Whether at parish, town, district or county level, councils often provide crucial services. They educate the young, provide care for the elderly, keep the streets clean and often help to keep our communities safe. I suspect that everyone in the Chamber has criticisms of certain decisions or oversights, but local councils employ thousands of unsung heroes who, day after day, make a real difference to our constituents' lives. Local councils, however, often have to make difficult and unpopular decisions. On waste management, for example, it is local authorities that make the difficult decisions on the ground. Local government therefore deserves a financial settlement that fully reflects changing needs and rising expectations.
	As we have heard, Ministers claim that local government has received a generously funded settlement since 1997, and they cite a real-terms increase approaching 40 per cent. Once we strip out all the ring-fenced grants, not least for education, the increase is, as we heard earlier, just 14 per cent. in real terms. In other words, there has been a measly 1.5 per cent. per annum in the past nine years or so. In Hertfordshire, our general grant has increased in cash terms by 52 per cent. over the past 10 years. Some 46 per cent. of that increase has been required simply to cover inflation and Whitehall-led changes in formula and functions. As a result, our councils have received only a 6 per cent. increase over 10 years to cover other cost pressures, including, as we have heard, the rising burden of care for the elderly.
	At the same time, the Government have piled new statutory responsibilities on to councils, tying them up with targets and red tape. Like my hon. Friend, I looked at some of those targets. Since 1997, Ministers have, between them, generated 1,500 performance targets, 734 objectives, 273 measures, 183 aims, 66 value-for-money targets, and 11 standards of maintenance, so they have been rather busy, as we can see. The problem is that the cost resulting from all that frenetic activity has proved to be hideous, both financially and in terms of lost time.
	The background to today's financial statement is one of rising prices. The consumer prices index stands at 3 per cent., and the retail prices index at 4.4 per cent., but energy costs, for example, are rising by well in excess of 10 per cent. Despite rising prices and costs, my authorities, Hertfordshire county council and East Herts district council, have been offered just 2.7 per cent. The settlement completely fails to take into account the real costs of their services. Take the county council; inflation alone will mean 19 million in extra costs. A deliberate pattern has been woven into the settlement. The Government either take decisions that result in new duties for councils, or make settlements that increase their costs.
	The county council has experienced a rise in landfill tax, which will cost it another 1.8 million. We heard about NHS cost-shunting earlier, and the NHS is being squeezed in Hertfordshire, too, with many care costs being pushed back on to the county council. Our county hall reckons that that is another 2 million in the coming year. The Government made a proud boast about concessionary fares for the elderly, but the scheme comes without full funding, a fact that we debated earlier. The result is that East Herts district council will have to find more than 730,000 next year for a deal over which it has absolutely no say. Every year, both councils continue to pay for the Chancellor's decision to raid pensions by scrapping advance corporation tax relief. The result for the county authority is another 1.5 million of expense.
	Sadly, the current financial settlement is a classic example of the way in which the Government treat our councils. They give them more jobs, but keep back the money. They announce generous settlements, but get council tax payers to pick up the tab. However, it is not just the Government's actions that cause problems. They have failed to acknowledge and respond to the changing social demands in our communities. On social care, for example, there is a rapid and continuous increase in the size of the elderly population. That group's needs and expectations are, of course, considerable. In Hertfordshire, the increased number of adults who need essential support is projected to add another 10 million of cost, next year and every year.
	Care costs are projected to increase by as much as 6 per cent. per placement, due in part to new Government standards. I do not doubt that, as the Minister will claim, good intentions lie behind those standards, but I am deeply concerned that those intentions are not accompanied with the money that is needed to make them work. The irony is that good, efficient authorities do not seem to be rewarded. According to the Government, Hertfordshire county council is an efficient authority. It has exceeded its Gershon efficiency target and has made cashable savings of 70 million in 10 years, and it intends to keep to the prudent path. However, because Hertfordshire is a floor authority, its ability to borrow in the way that it thinks best is severely limited.
	In Hertford, the Richard Hale school has led an excellent campaign to build a desperately needed sports hall. The scheme has cross-community support and would benefit both the town and the school. Indeed, the county council would like to support it, if it could, but it tells me that because of Government rules on borrowing for floor authorities, it simply cannot help the school next year. Its hands are tied. Where is the logic in that? Why tie the hands of good, efficient councils in that way?
	The financial settlement is part of a broader pattern. My councils have had their duties increased, and their costs have risen. Their wage bills have been increased for them, and their tax bills have been raised. At the same time, the Government have switched funds away or tied up projects in endless red tape. The result is that council tax bills have soared. Since 1997, the average council tax bill for my constituents has risen by 84 per cent., so that is an 84 per cent. increase for what is essentially the same service. This huge increase is especially unfair on those on fixed incomes, such as the elderly. They cannot hope that a pay rise will bail them out. Instead, they feel they have to cut back on other things to pay a tax that they increasingly resent. It might be their heating, or a birthday present for a grandchild. That is the price of the Government's policy.
	Ministers should realise that my constituents know exactly where the blame lies. Although all councils must strive to be more efficient, the Government also have a duty to provide a fair settlement which does not switch our funds away without good reason, matches funds with new responsibilities, and does not stop good councils backing projects that are valued in the community. That is what my councils and our taxpayers are seeking, and it is what they deserve. I regret to say that that is not what the Government are delivering.

Lorely Burt: The hon. Member for Mole Valley (Sir Paul Beresford) said that his local authority was on the floor. That is an appropriate description. My local authority, Solihull, is on the ropes and on the floor, having to cope with 7 million worth of cuts this year, as it did last year, with more to come.
	I am grateful to be called to speak in this short debate, because the constituents of Solihull feel a deep sense of anger at the settlement that we have received this year. Some Labour Membersthere are not many in their placemay think that somewhere as posh sounding as Solihull does not need a big settlement, and that people there earn more, live in big houses and somehow deserve to be left short of income. Solihull is often referred to as the posh bit of Birminghama place where Brummies aspire to move out tobut the borough of Solihull contains four out of the 10 per cent. most deprived areas in England. Even in the more affluent parts of the borough, the need for services is great.
	Solihull has 16 per cent. more elderly than the national average, or indeed the average for next-door Birmingham. One third of those aged 85 or over need intensive care. Every year Solihull gets the lowest education grant of all the metropolitan authorities, and every year the council overspends its budget for the most vulnerable for care for the elderly and for children.
	The Conservative-run council has tried hard to balance its books, making hugely unpopular decisions like cutting music services for children and even shutting the public toilets, which caused a public outcry. Visitors, the elderly, parents with children and people with medical conditions cannot go to a public loo to spend a penny. Toilet talk may have its humorous side, but the toilets were closed to save just 220,000, and that is no laughing matter.
	To get some investment into the borough, the council has complied by introducing an unwanted and unneeded red route, costing over 4 million. That is 4 million of Government money, so it is said, but in reality it is 4 million of our money, our taxes, misused in useless Government projects when the money could and should have been better spent on children and the elderly.
	Solihull is the lowest funded metropolitan borough council in England, and perhaps it should be. Other areas have greater social deprivation overall than we do. But does the Minister agree that in an attempt to redress social deprivation, we have got things slightly out of proportion? Solihull is destined to receive a grant allocation this year of 243.79 per head of population. Next door in Birmingham, the allocation is 582. That is 2.4 times as much.
	With a rise in grant of just 1 million, Solihull is bracing itself for major cuts to services, major redundancies, and major losses to everyone of facilities and services. For every 1 per head rise in Solihull, Birmingham gets 17. I do not get it, and I am afraid that my constituents do not either. Can the Minister explain how anyone can work out that a borough with four of the most deprived wards in England, a disproportionate share of elderly people needing care, children to educate, social services to provide, roads to maintain, bins to empty, and so on, can do that on 40 per cent. of the grant of the borough next door and only 53 per cent. of the national average?
	The choices for Solihull are stark. Our officers are to be commended that Solihull has achieved an overall three star rating on efficiency and performance, but what is the point in performing so well when you get kicked in the teeth by being starved of funds? With 7 million pounds of cuts to find, the days of belt tightening are over. Even by raising council tax by the maximum possible without being capped, there is no surplus fat to cut, so we are talking amputation time. Perhaps the Minister will explain to my constituents and to those who run the council just how we are to maintain our basic services; and, since we clearly cannot, who should lose outthe elderly, the children with special needs, the environment, or what? Could we have a review of proportionality in setting the formula? We are only asking for fairness and reasonableness. We paid the taxes in the first place; we would just like a little bit more of them back .

Graham Stuart: I should like to discuss the situation in the East Riding of Yorkshire, where the local government finance settlement is a tale of light and darkof community champions fighting community betrayal. It is a tale of outstanding success and outstanding performance by the Conservative-led East Riding of Yorkshire council set against the abysmal waste and systematic abandonment of vital rural services by a corrupt and failing Labour Government. The results of this Labour ineptitude, not to mention gerrymandering, are broken care, lost opportunity in our education system, and suffering by the old, the weak, the ill and the poor. Truly, this is a tale of the good, the bad and the ugly.
	I will start with the goodit is a delight for me to do soby congratulating East Riding of Yorkshire council, which is led by the Conservatives and has been transformed under Conservative leadership. In 1996, when East Riding of Yorkshire council was formed, it had the fourth highest council tax in England. In 2006, it had fallen to 245th out of 356. It had a four star rating for benefits in the 2005 English council league, which made a real difference to those with leastas, I am proud to say, Conservative councils so often do around the country. In education, the council is in the top 20 per cent. of performers. It is 17th nationally for GCSE results, with 61 per cent. of pupils achieving five A to C grades compared with 54 per cent. nationally. There has been a tale of continuous improvement in that respect.
	The council has a record of extremely good financial management. Last year, it was regarded as one of the three financially best run councils in the country. I am delighted to share with the House the fact that this year it has been made top council in the country in terms of financial management. It has delivered the highest possible score in all areas of assessment: financial reporting, financial standing, financial management, internal control, andthe issue with which I am most proud to be associatedvalue for money. That is what Conservative leadership has delivered in the East Riding of Yorkshire. In Conservative hands, East Riding of Yorkshire council delivers the best value for money in the entire country. I know that when the electorate are given the opportunity in May, they will seek to re-elect those successful councillors and, I sincerely hope, add to them. That is a tale of outstanding performance by the Conservative-led council.
	Now we come on to the bad. Here we have a sustained assault on our rural schools through Labour underfunding. We have a sustained assault by Labour on rural NHS beds, with a proposal to close every single one in my constituency. If the primary care trust's preferred option goes through, the nearest NHS beds for intermediate care of the elderly will be based in Goole and Bridlingtonan hour and a half's drive away from where people live in villages around Withernsea, Hornsea and Beverley. That is just one way, so we are talking about a return trip of three to four hoursif, of course, people have a car in the drive, but Withernsea is one of the poorest areas in the East Riding of Yorkshire and one of the poorest in the country. It is going to lose every NHS bed and I pay tribute to the GP surgery, which has been fighting against the cut imposed by the PCT appointed by the Secretary of State.
	If the Minister asks what relevance this matter has to the local government finance settlement, he should know full well that it is because of the impact on social services. It is because the East Riding of Yorkshire, an outstandingly well run authority, has none the less struggled to deliver care. Last year, there was just a 2 per cent. increase in the money available for either domiciliary care or care homes. That put care home owners under complete pressure. When challenged, the East Riding of Yorkshire council told me that it accepted that what it was being asked to do was unreasonable and that it could not be expected to do it.

Justine Greening: Does my hon. Friend agree that it is not only services that are often pushed on to local authoritiesfor example, when hospitals do not have beds and elderly people go to social services earlier than they would have donebut that the level of inflation in the budgets is also important? In my part of London, the budget inflation for social services is upwards of 6, 7, 8 or 9 per cent. Does my hon. Friend face similar problems in his area?

Graham Stuart: My hon. Friend is quite right to point out that inflation is running at higher than the standard rate in many areas, which has often been stoked by the Government's behaviour.
	Labour has been running a sustained attack on rural schools and rural NHS beds, as I said. We are also losing rural dentists. Under the new contract, two out of three dental surgeries in Hornsea closed. There is also a sustained attack by Labour on post offices, with an announcement that thousands more are at risk. Labour has launched a sustained attack on the funding of social care and there has been a sustained failure to support transport. Not only does Yorkshire receive an unfair share of the transport cake, but my constituents were shocked to learn that of the money given across Yorkshire last year, 85 per cent. of it was deemed by the Government to have the greatest need, funnily enough, in Labour-held constituencies. I repeat the figure of 85 per cent.although Labour holds only half the constituencies in Yorkshire. If we consider the land area covered as well, my constituents will draw the right lesson from that. I pay tribute to the  Yorkshire Post for its sustained campaign on the Government's failure to provide proper transport infrastructure [Interruption.]

Phil Woolas: Will the hon. Gentleman give way?

Graham Stuart: I am sure that the Minister will have plenty of time later to respond to the debate.
	That is the tale of the bad. We have done the good and the bad, so now we come on to the ugly. The ugly is the actual impact of the failure to look after rural areas, of the withdrawal of funds and the undermining of services. Who does it impact upon most? As ably set out by my hon. Friends already, the impact is greatest on those with least. It is they who will be forced to travel the furthest. It is they who will be isolated when beds are removed from the NHS and they who will suffer from the lack of delivery of social care. The poorest and weakest in our society will be the most affected.
	I mentioned earlier the 2 per cent. payment for domiciliary care going to the preferred providers in the East Riding of Yorkshire. Typicallyand certainly in the urban areasthe people who provide the service are cycling from house to house, often on the minimum wage and on split shifts, to support the elderly and the incontinent. They have only a short time in which to do so, but once again it is they who are paying the price for what the Government have done.
	The position of schools is also stark. When the gap between the richest and the poorest education authorities has widened, is not it time to implement measures to make the allocation of funding fairer and more equitable? In my constituency, well run, popular schools, such as Beverley grammar school and Beverley high school, are facing, at the end of the year, what the head teacher of Beverley high school described as the worst situation that she has known in 18 years. That school is outstandingthe Minister would be proud to boast of its contribution to results, not least for those in the poorest areas of Beverley. Yet there is a possibility of redundancies in the future.
	Sparsely populated areas, such as the East Riding of Yorkshire, have higher costs. They have higher transport costsmore than 11 million this year. A recent report from TeacherNet shows that primary schools with between 80 and 100 pupils cost 16 per cent. more per pupil. If the school has fewer than 50 pupils, the cost per pupil increases substantially, yet the funding for the East Riding of Yorkshire is inadequate. Indeed, it is the fourth lowest funded education authority in the country.

Stewart Jackson: Is my hon. Friend, like me, concerned about the iniquities of the Barnett formula, which is propagated by the Government and was established by their predecessors in 1978, whereby a substantial number of pupils in Scotland receive a huge amount fundingmuch more than his constituents and mine?

Mr. Deputy Speaker: Order. That is making the debate far wider than it should be. We are discussing local government finance here.

Graham Stuart: I simply comment that, when considering the unfair funding for the East Riding of Yorkshire, my constituents share a belief with my hon. Friend the Member for Peterborough (Mr. Jackson) that the Scottish settlement is unfair when compared with that in England. Scottish Members' ability to vote on English-only matters

Mr. Deputy Speaker: Order. The hon. Gentleman should have taken the hint. He is now trespassing into territory, which, as I have said, is off bounds.

Graham Stuart: I apologise and I shall move on, noting only that Scottish Members of Parliament will vote on the local government finance settlement in England. I would have thought that that was relevant.
	We hoped that the 2002 changed formula on local education funding would make the system fairer and more transparent. It has become more transparent but that only serves to make it clearer that, time and again, the authorities at the bottom of the funding league table lose out. Instead of being closed, the gap between the highest and the lowest funded local authorities is widening.  [Interruption.] If the Minister would like to intervene to explain why we are getting a fairer settlement over time, I should be delighted to hear from him.

Phil Woolas: The hon. Gentleman's authority is not a floor authority. His argument is therefore illogical.

Graham Stuart: My authority is subject to the ceiling. It is underfunded and therefore suffers from damping.

Phil Woolas: For the record, there are no ceilings in the settlement.

Graham Stuart: The local authority does not receive the money that it is supposed to receive. The floor system is a balancing act, as the Minister knows. The lack of funding to the East Riding of Yorkshire is not being remedied and the gap between richest and poorest is widening, not narrowing. That is why the hon. Member for Stafford (Mr. Kidney) chairs the f40 group and joins me and others with the lowest funded education authorities in the country to demand that the Government create a fairer funding settlement and change the current inequitable position.
	Many hon. Members have mentioned the impact of the settlement on care, as I have done.
	I congratulate the Conservative-led East Riding of Yorkshire council and urge the Minister to reverse the unfair funding. He claims that there is no assault on rural services

Phil Woolas: rose

Graham Stuart: I invite the Minister to visit my constituency. He will find that there are assaults on local services. We have a good Conservative-led local council and a bad Government who fail to listen.

Phil Woolas: rose

Graham Stuart: I invite the Minister to write a new script

Mr. Deputy Speaker: Order. The hon. Gentleman and the Minister should resume their seats at that point.

Andrew Pelling: I am sorry that I was not present in the Chamber for the start of the debate. I was lobbying the Mayor of London for money for my constituency.  [Interruption.] I had a positive meeting.
	Clearly, the council tax system, which stands behind the local government settlement, is now untenable. Many of those who will pay increased chargesparticularly in London, where the tax is due to increase by 5.7 per cent.will struggle, especially those senior citizens who wish to stay in the family home.
	I was pleased to hear the Minister talk about the work of the ONS on the issue of migration flows and the calculations that will be made. That applies particularly in my constituency, as it is the base for the immigration and nationality directorate. From my casework, I have the perception that the population to be served by local government might be as much as 40 per cent. larger than that measured by the old census figures.
	Previously, when I have raised the issue of the good treatment or otherwise of Croydon in the settlement, the Minister's response has been robust, if not aggressive, in referring to local enterprise growth initiative funding. Nevertheless, that money is for rejuvenation, and should not be applied through the local government settlement. In the past, Croydon was slow in lobbying the Government about the area cost adjustment, and the way in which it affected different boroughs in London. Croydon ended up being in the other outer-London group when a west London group was set up. As the hon. Member for Carshalton and Wallington (Tom Brake) is in the Chamber, I pay tribute to the London borough of Sutton, which was rather more adept at lobbying on the issue than Croydon. The cost to Croydon has been 15 million a year in grant over the three-year period. I very much hope that the settlement working group work programme will consider closely the issue of area cost adjustment geography, which has a real impact on the allocation of moneys to a place such as Croydon.
	For many London boroughs, certain issues are particularly challenging. In my earlier intervention on concessionary fares, I mentioned that the demands on Croydon are increasing by 862,000 a year, which is an 8.3 per cent. increase. I should have said that that is before the impact of any changes to the national scheme in future years. Because of migration issues, Croydon faces particular problems in relation to asylum and its costs. We face a shortfall of 4 million in that area, as well as a shortfall of 3.8 million in the area of learning disability. We also face challenges in dealing with the issue of single status, as do other local authorities. Following approaches from boroughs, the Minister's Department has agreed that there should be a capitalisation of many of those costs. Within the limited amount of overall capitalisation allowed across the country, however, it is likely that there will be little real impact on the extra provision and flexibility allowed.
	I am aware that we are tight on time, so I shall speak for just one more minute. I should like to return to the issue of asylum seekers and its effect on the budget of the London borough of Croydon. While strenuous efforts are made by Croydon and other London councils to alleviate the burden placed on them by the cost of asylum, several areas still need to be addressed. There is a lack of overall financial provision for post-16 to 18 age groups. Even where there is such provision, payments are not made within a reasonable period. That has been addressed by the Home Office for 2006-07, but outstanding issues in prior years remain, going back to 2002-03. I am sure that almost all Members would regard that as an unsatisfactory approach. The funding methodology used by the Department for Education and Skills is even more bizarre. Shortfalls go back to 2004-05, which must make planning very difficult for councils, quite apart from the impact on cash-flow management.
	There is also a failure to address the support needs of asylum seekers with special needsboth while they are awaiting determination of their asylum applications and following a negative decisionas well as the support needs of others who are subject to immigration control and have no other recourse to public funds.
	I have exceeded my minute. I hope that the Minister will be able to reassure me that he is listening to Croydon's case, which I think has been put in a rational and constructive fashion. The borough faces real challenges: for instance, it receives 40 million less per resident than Ealing.

Andrew Slaughter: The hon. Gentleman knows what he is talking about. Like the hon. Member for Beverley and Holderness (Mr. Stuart), he is expressing compassionate Conservatismof which I do not hear much in my areaand asking for more to be spent on services. But will he at least concede that local government funding is rising? Whether the figure is 39 per cent. or 14 per cent., there are, as the LGA says, real increases. How different the present position is from that when the hon. Gentleman's party was in power.

Andrew Pelling: My hon. Friends and I have tried to be constructive rather than going over past experiences. We should be positive about what the settlement will mean in some boroughs.
	As there is not really enough time for others to speak, I will make a few more points. We ought to be concerned about changes considered during the period of a multi-year settlement that will have an impact on boroughs' finances without any reassessment of the financial effect of that settlement. For example, a 5 per cent. cut in the housing benefit cap for private sector leasing exclusively in London in 2007-08 would have a very negative impact. It has been estimated that it would cost Croydon 73,000 per year, and the effect on several other London boroughs would probably be even more severe. In a year when the Minister is trying to convey the message that stability is what he seeks, that strikes me as a contradictory approach. There is also consternation about the cost of proposals to change the payment profiles of formula grant and national non-domestic rate. That change will probably cost my borough a further 70,000 a year, and it too strikes me as unnecessary in the context of a three-year settlement.
	I am pleased that the Minister is willing to review the geography of the area cost adjustment. I am sure that officials from his Department are undertaking the preliminary work in respect of a small number of ACA areas in which there are data anomalies. I hope that he will reassure me that Croydon will be included in the review. In my opinion it is closely related to south-west London authorities such as Sutton, and should not be isolated in the outer-London group. I apologise to some of my south-west London colleagues who may feel that they have been squeezed out of the debate, but I think that that is due to earlier speeches rather than to mine.

Justine Greening: What my hon. Friend is saying is very relevant to my borough of Wandsworth. Does he agree that some boroughs' hard work to provide value for money for council tax payers should be reflected in the Government's formula for allocation of funds, and does he believe that it is reflected adequately at present?

Andrew Pelling: I agree with my hon. Friend. It is reasonable to expect that good performance should be rewarded, and also that cognisance should be given to the Government's approach by rewarding delivering on Government policies. I know from experience that there might be disagreements between the two boroughs that my hon. Friend and I represent in the approach taken on housing, but it is amazingly counter-intuitive that, when boroughs such as Croydon deliver on Government targets for providing extra housing, they should subsequently be punished for having done so in further allocations for the new year.
	I appreciate that that falls outside the local government financial settlement, but it has a real knock-on effect in the housing revenue account in boroughs such as Croydon. Not only is that a particular difficulty, but of the 57 million that is taken into the London borough of Croydon, 14 million is transferred to other authorities. The Government are trying to encourage the provision of additional council housing directlynot through housing associationseven though that might be an old-fashioned Socialist Workers party type of policy. I agree with my hon. Friend that the approach in any funding process should be to reward success and good performance and also to reward delivering on Government policies.
	Our approach to local government finance must now be set in a new context. We look forward to the Lyons review. The council tax cannot continue. Although we should commemorate the good work done by Lord Heseltine, the time has come to move to a new system of local government finance.

Susan Kramer: I am conscious that the Minister must be given adequate time to respond to the debate, so let me cut to the quick of my comments. I want to address the needs of south-west London. I shall talk specifically about one of my two councilsRichmond upon Thames. I know that my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) was going to address Kingston issues, and I shall mention them only in passing and look for another opportunity to raise them with the Minister.
	As the Minister knows, Richmond upon Thames is the lowest-funded borough in London. The numbers that I have heard mentioned in this debate for other councils would leave Richmond in clover. The relevant sum for Richmond is 127 per head in 2006-07, which is 57 lower than that for the next lowest borough in London, and it will be 60 lower for 2007-08 because, as I said in an intervention, Richmond's budget will be cut in the 2007-08 round. In saying cut I am using exactly the standard that the Minister asked for: comparing on a like-with-like basis year on year.
	The Minister said, You must look back over a 10-year period, but 10 years ago the base for Richmond was wrong. What was a small number then has become magnified year on year to a number today which I believe even he and his senior officials would recognise is totally out of kilter. Although Richmond is different from other boroughs in that it is well-to-do, it is not that different from neighbouring boroughs. That number is now completely disproportionate in comparison with those for other boroughs.
	For Richmond, only 19 per cent. of local council expenditure comes from grant. It has a very high council tax to deal with that situation, but it is also the lowest spending authority in Londonit has the lowest expenditure per head. That demonstrates that it is a borough with no fat to cut, and with the additional burdens that have been described as a result of NHS cost-shunting, adult care costs and special needs for young children, the pressures are becoming intolerable.
	Both Richmond and Kingston, the two boroughs that I know best, have a reputation for doing very well for children with special needs. Obviously, the education budget is picked up within the schools budget, but the care that such children need comes along with that, and the responsibility falls on the local authorities. We have good anecdotal evidencewe do not yet have hard survey evidencethat, because their reputation is so good, people are moving to the borough to take advantage of such care, thereby throwing more and more cost on to the local authorities. In Kingston, the same thing is certainly happening with social care. Frankly, the boroughs' needs are therefore acute.
	In the last minute that I shall take, I want to make a special plea for the south-west London boroughs as a whole. I ask the Minister to meet them collectively to look at their problems. The amount of revenue support grant that they receive collectively is far lower than that received by others. Only 35 per cent. of their collective expenditure is funded by grant, and they collect over 100 million more in business rates than is returned to them. Kingston, for example, pays far more in business ratessome 67 million a yearthan is recovered in various grants collectively, which is about 32 million. The resource allocation has become completely out of kilter.
	When I raised this issue in an intervention, the Minister smiled and with a slight snicker mentioned that Richmond upon Thames has developed a car parking charging regime to hit gas guzzlers, thereby implying, as many do, that it is a leafy, wealthy suburb. The elderly in our boroughs need care just as much as the elderly in any other. Children with special needs in our boroughs need care just as much as those in any other. The attitude that such places are leafy suburbs and should therefore only providethat their needs do not have to be taken into considerationis generally unacceptable. It has begun to irritate people beyond the point of tolerance to hear those sentiments constantly expressed. I thank the Minister for listening.

Phil Woolas: I apologise at the outset to Members in all parts of the House if I cannot answer the specific questions that some have raised on their constituents' behalf. I of course understand why Members have made their special pleas, as well as their more general points, and I shall try to answer as many of those questions as I can.
	I want to begin by painting the bigger picture. Underlying this debate has been the assumption that the Government's grant settlement should fully fund the inflationary pressures on local government. Indeed, the hon. Member for Hertford and Stortford (Mr. Prisk) said that the settlement should fully reflect changing needs and demands. Of course, that is a desirable wish list, but the difficulty that the Government would have under any circumstances, were that approach to be accepted, is that it would simply fuel the very inflationary demands that councils face. One cannot possibly base a local government finance system that has distributed more than 60 billion on that premise.
	I turn to the 14 per cent. figure given by the Local Government Association, which has been quoted in order to point out the difference between schools and non-schools funding. If one takes into account the full grant allocation, the figure is 29 per cent. in real terms. Of course, one can always make use of statistics, and the LGA acknowledges that this is an above-inflation figure. However, the social care issues that have been raised are of course extremely important.
	The hon. Member for Brentwood and Ongar (Mr. Pickles) said that the council tax would go up as a result of home improvements, of having a nice view and of living in a nice area. Let me try again to scotch this rumour. Council tax, like the rates before it, is a value-based tax, so it is already inherent within it that, where there is a relative advantage in property value, a higher tax band rate is paid, other things being equal. There are no plans to change that, despite the excellent cost-saving computer that the Valuation Office Agency has. In Northern Ireland, another scaremongering story is put about. The changes there were instigated by the Northern Ireland Executive, not the Government, and are bringing Northern Ireland from a rental-based system of property tax to a capital-based one. It is indeed Northern Ireland that is following England, rather than the other way around.
	The hon. Gentleman mentioned Scotland and an executive report from the Labour-Liberal Democrat Executive. In fact, it was an independent report that was, on the whole, dismissed by the Executive within minutes of being published, at least as far as the point systems were concerned. He triedas have othersto paint the picture that the concessionary fares system is unfunded, but he cannot have his cake and eat it, as much as he tries. He cannot say that we should move towards less ring-fencinga policy that we supportand then argue that specific grants should match pound for pound. It is not the Government who set the bus fare, but the bus company. Local authorities asked for a formula-based distribution of funding and we provided 350 million. None of the councils that were positive winners as a resultwhich included the councils of those hon. Members who mentioned this issuesaid at the time that they did not like that distribution. The fact is that the Government have now provided another 250 million for a nationwide scheme.
	On licence fees, the Licensing Act 2003 is a devolutionary measure. Again, the Opposition cannot have their cake and eat it. When the Leader of the Opposition attends the Local Government Association conference and promises an end to all ring-fencing, Opposition Members cannot criticise us when we do the same.

Eric Pickles: Given that the Minister and his predecessor gave some clear undertakings to the Chamber that local authorities would be fully compensatedthose were the exact words

Phil Woolas: On licensing.

Eric Pickles: Yes, I am just talking about licensingI was restricting my comments because of the time. That has not been the case and the independent Elton inquiry suggested that local authorities should receive 43 million. What will the Minister do?

Phil Woolas: The hon. Gentleman makes a point. The Elton report landed on my desk this morning and the Government take its consideration of the new burden seriously

Graham Stuart: What is the answer?

Phil Woolas: From the hon. Gentleman's political perspective, he should support the idea of value for money. If he seriously proposed that any Government should fully fund the demands on local authorities, he would set in train an inflationary economic policy that would render the local government grant settlement inoperable. The net new costs of the measuresthe Opposition always talk about the gross costshave to be taken into account.
	Some hon. Members asked specific questions about the settlement. The hon. Member for Hertford and Stortford raised several points, including one about advance corporation tax and the changes to pensions. I would point out that at the time the Government provided 150 million of funding for local government because of that change.
	My hon. Friend the Member for Wigan (Mr. Turner) generally welcomed the settlement, although he had some very strong criticisms of it, especially of the double damping on the floor. The hon. Member for Beverley and Holderness (Mr. Stuart), who represents the East Riding council area, made the serious accusation that the settlement was gerrymandering. He actually used that word. That is a serious accusation. However, the councils in his area that will receive the money through the funding system on concessionary fares are not Labour. I wish that they were, but they are not. My hon. Friend the Member for Wigan has criticised this Government strongly and consistently for our policy on social services damping, as has my hon. Friend the Member for Barnsley, Central (Mr. Illsley). At the same time, the accusation is made that the settlement is an example of gerrymandering.

Graham Stuart: Will the Minister give way?

Phil Woolas: No. The hon. Gentleman had his say, and refused to give way to me earlier on this point. I acknowledge the point about the damping floor. I have not been able to make changes in this settlement, but I shall look at the matter again.
	The right hon. Member for North-West Hampshire (Sir George Young) asked me for confirmation about the permanence of floors, of which there are two types. One is the overall floor, from which I think that his county benefitsalthough he said that he wished that it was not a floor authority. The second type of floor includes those within social services, which will be taken into consideration.
	The hon. Member for Mole Valley (Sir Paul Beresford) made some powerful points about cost- shunting and the inflationary pressures faced by local authorities. He talked about the targets for the local area agreement, and said that there was a fear that the agreement could become too bureaucratic. I agree, and invite him to support our Local Government and Public Involvement in Health Bill. He voted against it on Second Reading, but it achieves exactly what he asked me to achieve by means of the funding system.
	My hon. Friend the Member for Barnsley, Central, like his colleagues from SIGOMA, spoke about double damping and the billion-pound business rate funding. He asked about equal pay for equal value, and I refer him to the Government's recent statements on that subject.
	The hon. Member for Carshalton and Wallington (Tom Brake) described me as a chess grandmasternot a description that would be recognised in my household. He criticised the Government about the wage settlement, but I remind him that local council wages are agreed by councils, and not by the Government, so his criticism was unfair. He said that he wanted a local tax, thereby confirming a Liberal Democrat policy that I consider to be unworkable.
	My hon. Friend the Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) made some strong criticisms, and there was an exchange about Hammersmith. I believe that that has changed the whole debate
	 It being three hours after the commencement of proceedings on the motion, Mr. Speaker  put the Question, pursuant to Order [24 January].
	 Question agreed to.
	 Resolved,
	That the Local Government Finance Report (England) 2007-08, House of Commons Paper No. 231, a copy of which was laid before this House on 18th January, be approved.

LOCAL GOVERNMENT FINANCE

Resolved,
	That the Limitation of Council Tax and Precepts (Alternative Notional Amounts) Report (England) 2007-08, House of Commons Paper No. 232, a copy of which was laid before this House on 18th January, be approved. [Mr. Michael Foster.]

ARMED FORCES PENSIONS

Motion made, and Question proposed, That this House do now adjourn. [Mr. Michael Foster.]

Colin Challen: I am grateful to have this opportunity to raise the issue of armed forces pensions in this debate. It follows the launch of my early-day motion 67, which has now been signed by well over 100 hon. Members.
	I have been contacted by constituents who served in the armed forces before April 1975. They feel aggrieved at being denied a service pension, even though they had as many as 21 years' service in the forces. The rules have since been changed to allow servicemen and women with fewer than 22 years' service who retired after April 1975 to obtain a pension.
	Many of the former members of the armed forces who have contacted me are now at retirement age and feel bitter that they have got nothing to show for their often dangerous occupation. I have a letter from my constituent, Mr. Hutchinson of Morley, who wrote to me and said:
	I joined the Royal Navy as a boy second class in December 1927 and served until after the end of the 2nd World War, being released on December 1st 1945 as a Chief Yeoman of Signals. The reasons for my not continuing to serve for the full man's time of 22 years were the protracted periods away from home and the fact that I did not see my baby daughter until the war was over and she was then 17 months old.
	Another constituent, Mr. Sid West, told me of his 17 years in the Army. If he had retired with 22 years' service he would have left in 1978. It is strange indeed that had he been prescient or lucky enough to remain for even 20 years, he would have received a service pension. There are thousands in that position.
	I should declare a minor interest, as if the rules were changed again even my three years' service in the RAF until 1974 might qualify me for a penny or two. However, if my right hon. Friend the Minister of State responds positively to all my requests this evening, I shall gladly donate to charity whatever comes my way.
	From the response to a parliamentary question in March 2002, I understand that it has not been the policy of successive Governments to make retrospective changes to pension provision. The reason given is usually the enormous cost. However, there is no hard and fast rule that the policy should remain. What is the Government's estimate of the cost? Would not agreeing to a change build on the work of a previous Labour Government?
	In the difficult economic times of the mid-1970s the Labour Government made the first progressive rule change to lower the qualifying period. We had inherited a crumbling economy from Ted Heath, with balance of payments deficits, sky-high inflation and public spending that caused concernat least to the International Monetary Fund. However, let us look at the economy now; we may still have balance of payments deficits, but that is about the only comparison with 30 years ago, and we no longer seem to think that they are a problem. We are the fifth richest country in the world.
	We must find out what it would cost us to do better for veterans who retired before 1975 with fewer than 22 years' service. Previous answers to my parliamentary questions have shown that we keep detailed records about those who served and their length of service, although pay records are destroyed after seven years so it would be difficult to ascertain some of the facts, but we should try to address the issue.
	It is true that veterans with nine or more years' service were paid a gratuity in lieu of further entitlements, which would naturally have to be factored into the calculation and would reduce the amount of pension paid. However, to be candid, at a time when we seem determined to build a replacement for the Trident system, with an estimated cost of anything between 16 billion and 70 billion, we should recast our priorities.
	It is often said that the mark of a civilised society is how it treats its elderly. I have never heard it said that the mark of a civilised society is that it should spend huge sums of money on weapons of mass destruction. In the 1970s when the Government spent billions on the Chevaline nuclear upgrade system, many people probably thought that with the cold war in full swing it was money well spent, but now we are faced with a more complex world, and we should behave differently in response to it. The morale of our forces would be boosted tremendously by the knowledge that we were prepared to look favourably on their forebears' claims. Many servicemen and women have older relatives who could benefit from a service pension; it would be phase 2 of a Labour Government delivering for our armed forces.
	I acknowledge that there are arguments that might deflect attention away from the demands of this campaign. Perhaps the most significant is that this Labour Government introduced the pension credit, which has lifted many poor pensioners out of poverty. I bet that many of those to whom the pension credit has been paid are veterans, who because of the parsimony of earlier Governments may have worked for a generation in the forces with nothing to show for it in their later years. If the campaign succeeded, there is no doubt that the structure of the pension credit would mean that veterans who received a service pension on the one hand would lose pension credit on the other. However, I know which I would prefernot a means-tested benefit that required much form filling, information gathering and perhaps even a loss of pride, but an as-of-right pension in recognition of service rendered.
	The argument has also been made that to accede to the demand would be to acknowledge the demands of others in the public sector in similar situationsa costly precedent indeed. However, it was only a few weeks ago that I first heard of the so-called covenant between members of the armed forces, society and the Government. From my time in the forces I do not recollect ever seeing, being told of or signing such a covenant, which apparently defines the relationship between those who pledge to die for their country, if need be, and their country.
	I remember walking into the RAF recruitment office in Hull in 1971. I signed a form and swore an oath in front of an officer that I would be willing to make the ultimate sacrifice. I have to admit that I never anticipated that that eventuality would come to pass. But when we are told that members of the armed forces are just like any other public sector work force, I seriously question that. Were all public sector workers asked to take an oath to say that they would lay down their lives in the course of duty? No, they were not. The armed forces were treated differently then and they should be treated differently now.
	Another excuse that has been thrown back in the faces of veterans in the course of the campaign is that they should have known all along that their terms and conditions did not allow for a pension when their service was less than 22 years. Indeed they did not. However, the terms and conditions were changed beneficially for many of those people by a Labour Government in 1975. Of course, when changes are introduced there is always a publicity campaign, but I suspect that one could easily wonder how effective the campaign was in the forces at that time. It has been alleged to me that many of the veterans who make up the group of people who were coming close to 22 years' service in 1974-75 were shunted out of the forces on all sorts of pretexts so that they would not qualify. They were encouraged to leave, while dissemination of information on personnel issues was not always efficient or accurate.
	I wonder how many men and women walked away with exemplary certificates of discharge, where the reason for discharge was premature voluntary release after being pressurised to go. Those people may have been led to believe that their service would contribute towards a pension. I have in my possession a copy of a Royal Marines certificate of discharge, dated 6 June 1972, which tells the recipient that he has accumulated
	five years and 218 days towards pension.
	That was on the piece of paper that the discharged serviceman left with. It is misleading and inaccurate, as far as it goes. He may not have thought any more of it until he came to collect his pension and found that there was nothing there to collect.
	I do not blame the Labour Government for the way in which they handled the matter in 1975. They acted in the better interests of working people, in the way they thought that they could afford to at the time. However, what I am saying now is that we have to revisit the issue, otherwise it will go away only when all the veterans that we are talking about are deadand many have died already. Let us remember that we are still talking about veterans of the second world war, Korea, Suez, Palestine and many other conflicts around the world.
	What am I asking the Government to do? Revisiting the issue means that the Secretary of State for Defence should meet a representative delegation of those affected. It means the Government should say what they think some kind of recompense would cost. It means acknowledging that these veterans do have a grievance and it means that they will no longer, as they see it themselves, be forgotten heroes. At every Remembrance Sunday service we say,
	They shall not grow old as we grow old
	and, We will remember them, and we do. Now, in the democracythe wealthy democracythat those people died for, let us also remember those who have grown old.
	I will conclude with the words of my constituent, Mr. Hutchinson:
	It does seem somewhat unfair that servicemen such as myself do not receive any recognition of the years spent in defence of our country. Reading the Royal Navy's publication 'Navy News' I am given to understand that it is possible for a naval rating to receive a pension after serving as little as 18 months. This does appear a little unjust.
	I have to say that Mr. Hutchinson is a master of understatement. He says that it is somewhat unfair and a little unjust. It is that humble, almost apologetic, entreaty that underscores the strength of his case. I urge my right hon. Friend to heed this campaign and respond accordingly.

Adam Ingram: My hon. Friend the Member for Morley and Rothwell (Colin Challen) has done well to secure a debate on equal pension provision for service personnel, regardless of when they served in Her Majesty's armed forces. Although the subject of British armed forces pensions has a long history that stretches back to the time of Elizabeth I, it is better that I start nearer the present day.
	In the early 1970s, the Ministry of Defence introduced an armed forces pension scheme following the introduction of the military salary in 1970, which replaced the system of basic pay and allowances. The military salary meant that the MOD could link pensions to pay for the first time, and in April 1972, representative pay rates were introduced on which pensions for members of the armed forces pension scheme were based. That meant that under that scheme, members of the armed forces with the same rank and same number of years' reckonable service were awarded the same pension, regardless of their actual pay on leaving service. Those pension arrangements are actually made up of three separate schemes that were established under a range of prerogative and statutory powers. The current arrangements are found in the Naval and Marine Pay and Pensions (Non-Effective Benefits and Family Pensions) Order 2001, the Army Pensions Warrant 1977 and the Queen's regulations for the Royal Air Force. The enabling legislative powers are to be found respectively in the Naval and Marine Pay and Pensions Act 1865, the Pensions and Yeomanry Pay Act 1884 and the Air Force (Constitution) Act 1917.
	In the early 1970s, members of the schemes were awarded a pension only if they had completed at least 16 years' reckonable service as an officer, or 22 years' reckonable service in another rank. Engagements for shorter periods were on non-pensionable terms. However, gratuities were awarded to those who left without qualifying for a pension, but who had completed nine years' reckonable service as an officer, or 12 years' reckonable service in another rank. The definition of reckonable service is all paid service after the age of 21 for officers, or after the age of 18 for other ranks.
	Before the introduction of the Social Security Act 1973, there were no rights to preserved pensions in any public or private pension schemes. Most schemes had very restricted qualifying criteria for the award of pensions. For instance, to qualify for a pension under the civil service arrangements, an individual had to be over 50 and to have served for 10 or more years. Individuals who left voluntarily before meeting both these criteria lost their rights to pensions. The 1973 Act brought about changes by requiring all pension schemes to preserve pension rights for those who left service after 6 April 1975 and had completed at least five years' qualifying service and attained the age of 26. Subsequent Social Security Acts reduced the qualifying period from five years to two years and removed the age qualification requirement. The armed forces pension scheme incorporated those changes from the operative date of 6 April 1975. It is for that reason, and to differentiate that scheme from the new pension scheme introduced in 2005, that we now call the scheme AFPS 75.
	As my hon. Friend said, those changes were not retrospective. It is a legal principle that individuals receive benefits in accordance with the scheme rules that were in place at the time of their retirement. It is a principle of public service pensions policy, and one that has been upheld by successive Governments, that improvements to pension schemes are not made retrospective. If the changes were made retrospective, it would add significantly to the cost to the taxpayer, not least because the issue is common to other public service schemes, not just that for the armed forces.
	My hon. Friend asks me to distinguish between members of the armed forces and others who serve as public servants, such as teachers and members of the emergency services, but that would be a legally untenable position. He also asked me to estimate the costs involved. We have not made a specific estimate of the cost of backdating armed forces preserved pensions to prior to 1975, and my hon. Friend alluded to some of the difficulties that would prevent us from achieving that.
	We have made a general examination, and the numbers affected are very large, so the costs, whether for the armed forces or more widely, would be considerable and would run into billions of pounds. I fully recognise that a number of individuals who have no occupational pension rights for their time in the armed forces
	 It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.
	 Motion made, and Question proposed, That this House do now adjourn. [Mr. Alan Campbell.]

Adam Ingram: I recognise that a number of individuals who have no occupational pension rights for their time in the armed forces are aggrieved that improvements to pension provisions since the mid-1970s were not applied retrospectively, but that does not mean that the work and commitment of those who served in the armed forces before 1975 is not valued. We value their contribution in many other ways, but I have set out the context in which judgments have to be made. I urge my hon. Friend to accept that his campaign would not apply to the armed forces alone, and it would have to apply to all public sector schemes. The costs for the armed forces would be prohibitive, and the wider costs, too, would be of considerable magnitude and would be simply unaffordable.
	Successive Governments have taken the same view. There is no realistic prospect that this or any other Government could afford the many billions of pounds that would need to be found to address the issue. That is an easy statement to make, but the real test is the legal one. The issue has been legally tested, and a claim for pre-1975 pension entitlement for the armed forces failed in the High Court in 2003, in the House of Lords in 2004, and in the European Court of Human Rights in 2006. There are other legacy issues, in addition to the pre-1975 pension entitlement that arose from Government economic policies and other improvements to AFPS 75, which did not cover those who served before the changes were made. Issues such as pension troughs, widows' and widowers' pensions for life, widows' post-retirement entitlement, and widows' third-rate and half-rate pensions are not unique to the armed forces, as there is a read-across to other public sector schemes. As I have said, making retrospective changes to pension schemes would have financial implications across the wider public sector.
	My hon. Friend said that we are proposing to spend money on nuclear defence, and I accept that that is the case. He urged us not to spend that money and to give it to the pensioners instead. Everyone wants a say in how that money is spent but, interestingly, when the public considered the matter, it wanted to retain the country's nuclear defences. They will have another opportunity to consider the issue as the debate develops in the coming weeks before we make a decision. It is easy for my hon. Friend to make that equation, but he would have to queue up with everyone else who is campaigning for us not to go down that road and who has their own ideas about how that money should be disbursed. He should take into account, too, the public mood on that specific aspect of our national defence. I suspect, however, that we will find ourselves on different sides of the debate.
	Since the 1970s there have been a number of improvements to pension provisions. For example, since the mid-1980s, individuals have had to serve for only two years to be entitled to preserved pension benefits and, from 1978, widows' pension provisions were extended to widowers. AFPS 75 incorporated those improvements to the spirit and letter of the legislation that required their introduction. The Government recognise the importance of proper pension provision for the armed forces. Since 2000, attributable death benefits for widows and widowers have continued on remarriage. Since March 2003, pension benefits have been made available to eligible unmarried partners for service deaths related to conflict. In September 2003, the concession was extended to cover deaths attributable to service. Since April 2005, death-in-service lump sums have risen to three or four times pensionable salary, depending on whether the member belonged to AFPS 75 or the newly introduced armed forces pension scheme 2005.
	The introduction of the new pension and compensation schemes in April 2005 was a considerable achievement, given that it came at a time when outside schemes were under pressure to move away from defined benefit arrangements. The scheme benefits compare favourably with other public service schemes and with schemes in the private sector. They reflect modern best practice and provide for a significant increase in family benefits. I am confident that our new schemes are designed to meet the needs of the armed forces in the 21st century.
	My hon. Friend said that he had a small interest to declare, but I know that it is not the prospect of financial gain that prompted him to raise the subject, and I fully recognise the kind offer that he made. We have to set the arguments that he advances against the major developments that the Government brought about to improve the pensions of those who serve in Her Majesty's armed forces. I appreciate the concerns that have been raised, but I set out to explain the reason for the current position and to put it in context. I fully recognise that my hon. Friend's early-day motion has attracted support. I just hope that those who signed it will read this debate, understand the logic of my argument, and reflect on their support for that motion.
	My hon. Friend asked for a meeting between representatives from his campaign and the Secretary of State. As ever, that would be a matter for the Secretary of State, but I will certainly draw my right hon. Friend's attention to the request. I said at the beginning of my remarks that I would not refer back to the time of Queen Elizabeth I, and although I notice that we have a considerable amount of time left, I do not intend to fill it by talking about what happened in that period of history. We must consider the considerable progress made in the way in which we look after people. As my hon. Friend generally recognised, there was a change for the better in 1975. That decision goes back to 1973, although it was implemented in 1975, and it was delivered by the Governments of the time.
	The changes that my hon. Friend asks for would have an immense impact on public expenditure, and that is the why successive Governments did not revisit the decision; it was not from a lack of recognition of those who serve in Her Majesty's armed forces, or elsewhere in public services. I think that that is a solid argument, and I ask my hon. Friend to reflect on his campaign.
	 Question put and agreed to.
	 Adjourned accordingly at seven minutes past Seven o'clock.